4 Ways B2B Payments Are Changing Business
The B2B industry has historically been slow at adapting to automated payments compared to its consumer counterparts. However, this past year has been a catalyst for substantial change and the business-to-business ecosystem is embracing new technology like never before. And this new B2B technology is not only changing the industry’s payment models but is changing the B2B landscape altogether. Below are some examples of how that is happening.
1. More Affordable Options
Thanks to the advances in technology, such as the cloud or mobile apps, businesses have more payment options that will save them both time and money. For merchants that have embraced technology this past year, they have learned how beneficial it can be in sharing documents, hosting meetings online, and sending out invoices. That same technology is being embraced for B2B payments where owners can automate invoicing by setting-up recurring payments, even for multiple businesses. And these advances can add to the bottom line.
2. Rise of Purchasing Cards
According to the NAPCP, “A Purchasing Card (P‑Card) is a type of Commercial Card that allows organizations to take advantage of the existing credit card infrastructure to make business-to-business (B2B) electronic payments for a variety of business expenses (goods and services).”
Purchasing cards have become increasingly more popular in the 21st Century and are positioned to replace checks. Businesses are taking advantage of purchasing cards because funds are electronically funded, and receipts are faster – both of which increase cash flow. Purchasing cards can also reduce costs by decreasing invoice creation and mailing. Additionally, businesses can also increase sales and improve customer satisfaction.
3. Catering to Millennials
The Pew Research Center has found that Millennials have replaced Gen Xers as the largest workforce in the U.S. That also means that Americans will have a new generation of business owners who demand a new of way of doing business. Millennials are looking for new payment solutions to pay each other that revolve around mobile banking and cloud-based platforms that are fast and convenient.
4. Real-Time Notifications
Traditional payment systems, like paper invoicing, can lead to not getting paid on-time. Technology is helping to rectify these issues by providing real-time notifications. For example, when an invoice is sent using invoicing software, merchants have the ability to track if the invoice has been received, is pending, or paid in-full, as opposed to waiting for a check to arrive in the mail.
5. Fintech Innovation is Just the Beginning
All the points listed above are why the Fintech industry will continue to dominate the payments industry. As TechCrunch points out, “Mobile apps will likely see the largest amount of investment, and development will remain focused on creating a faster and more flexible platform to transmit funds.” There will also be companies hoping to solve security concerns and globalize the current payment structure specifically through with cryptocurrency like bitcoin or the blockchain.
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