Entering a New Era of Innovation for B2B Payments

By Gavin Cicchinelli • Published January 11, 2022 • 4 minute read

Global payments are thriving with innovation and growth. Boston Consulting Group anticipates the total revenue pool for the payments industry could nearly double by 2030, up to $2.9 trillion from $1.5 trillion today. But despite overall industry advancements, closer inspection reveals some serious disparities between the consumer and business payment sectors.

When we think about innovation in payments, the consumer sector – which includes business-to-consumer (B2C) and consumer-to-consumer (C2C) – carries the lead by a long shot. For some time now, it has been a hotbed of R&D and growth – and the market continues to mature and consolidate. There are now countless apps and tools that allow consumers to pay or transfer money on their smartphones or smartwatches in addition to a plethora of “buy now, pay later” financing solutions.

The business-to-business (B2B) payments sector, on the other hand, paints a different picture. Compared to B2C and C2C, B2B payments have been slow to digitize and modernize. It’s estimated that just one-third of global B2B spend is processed electronically. More than half of the $120 trillion in B2B payments made across the world are still handled through checks. While consumers can purchase virtually anything instantly via their mobile device, B2B payments remain complex, costly and archaic.

Why Innovation is Profoundly Lopsided in B2B vs. B2C Payments

Digging into this lopsidedness requires understanding why B2B payments has been largely untouched by meaningful innovation. At a macro level, the answer is straightforward – B2B payments is inherently more complex than consumer payments, and the challenges more difficult to solve. Buyers and suppliers do business across increasingly global supply chains. There are multiple jurisdictions and currencies to deal with and, in some cases, different regulations governing how soon suppliers need to be paid. It is also typically not a point-of-sale situation. Payment terms and methods vary across the supplier base.

There is also a level of technical complexity that must be addressed. Accounting departments often use multiple payment platforms to pay suppliers based on a wide variety of factors, including geography, whether suppliers were brought onboard via acquisition and if legacy payment solutions are already in place, as well as early versus on-time payments. It is not uncommon for a global company to have a dozen payment solutions in place to pay suppliers in different geographies in addition to programs to manage supply chain finance and dynamic discounting programs.

Managing multiple payment systems makes the simplest tasks tedious. Activities like updating a supplier’s banking information are redundant, manual and vulnerable to errors that an already overtaxed accounts payable team later has to fix. All of this results in a tremendous burden for both buyers and suppliers. Technical and geographical complexity paired with limited resources makes it hard for buyers to pay suppliers on time. On the supplier side, late payments require chasing – another resource burden – and result in poor cash flow forecasting.

Leading the Way in Modernizing and Transforming B2B Payments

B2B payments is ripe for transformation in same way the consumer pay market was not that many years ago. Business leaders are seeking innovative ways to provide a “consumer-like” pay experience – one that’s streamlined, efficient and automated. McKinsey reports that 66% of B2B decision-makers believe self-service is more important to customers than traditional sales interactions. That 18% increase from pre-pandemic levels is an indicator of the rapid shifts happening in how business is being conducted. VC and PE firm investment in B2B payments validates the demand and opportunity for progress.

Fortunately, meaningful progress is being made in this area. PrimeRevenue is leading the way with its unified B2B payments solution, the SurePay Platform. The following capabilities are critical to meeting new demand for modernized B2B payment solutions:

  • A single platform to handle on-time and early payments to suppliers of all sizes across all geographies and currencies
  • Ability for suppliers to instantly track invoice payment and upcoming payment totals for improved payment forecasting
  • Robust reporting and audit trails for easy troubleshooting and compliance with various payment regulations
  • End-to-end payment automation from invoice uploads and remittance advice reports to trading specific invoices for early payment and instant visibility into payment status

Moving forward, the stagnation that has defined much of the B2B payments sector is coming to an end. We believe the modernization and automation of B2B payments will have a transformative impact on buyers, suppliers and the global payments industry – and our SurePay Platform is ready to forage the path ahead.

Want to learn more? Contact us.