Even with coronavirus-based innovation, B2B still has digital gaps
Overnight, the coronavirus has turned business operations upside down. And as a result, the shortcomings of the B2B payments space have been amplified.
Millions of workers are doing their jobs from home. Because of this, accounts receivable and accounts payable teams across the world need to be able to make and receive payments from the comfort of their homes, and antiquated methods and processes such as creating and processing paper checks simply do not fit into this new normal.
On top of this, for many businesses, this is an "all hands on deck" situation where optimizing employee resources to maintain both back office operations and customer service levels are of the utmost importance. Unfortunately, many businesses are operating with reduced headcount and will continue to do so, meaning bandwidth becomes even more scarce for many companies. In these scenarios, the innovation lag that the B2B payments space has experienced leads to an even more irrational burden. Even after the pandemic subsides, a more permanent shift to remote work is likely to take place, making the adoption of things like digital payments and end-to-end automation even more necessary.
Yes, the B2C space has been impacted in similar ways. But when it comes to the adoption of innovations such as digital payments, these shifts were already well underway for consumers. In this regard, the rate of innovation in these areas will be far more accelerated in the B2B ecosystem.
Even where there have been innovations in the B2B payments space, often it has not accounted for the needs of both sides of the B2B transaction, and thus, adoption has been slowed. For the most part, innovations have been geared towards buyers, tipping the balance of power in their favor. Shifting the focus more equitably to the supply side speeds adoption of payment technology and propels the industry to a whole new level.
We are already starting to see platforms and payment networks -- including activity from some of the world’s biggest incumbents -- aimed at making it easier for buyers and suppliers to use digital payments without needing to change current methods or compromise their needs. These innovations will continue to erode friction and ensure cash flows efficiently, and adoption will follow suit.
Cash flow has always been the lifeblood of a business. And in these challenging times, it’s more crucial than ever before. The imbalance of power exacerbated by innovations built for one side of the equation is simply unacceptable today. A/R & A/P teams need solutions that will make it easier for them to transact in this evolving and increasingly complex landscape.
While we will continue to see new technology and innovations in the B2C payments landscape, the fact is that innovation has become a means of survival for the B2B space. This increased urgency to reduce friction, combined with the activity we are already seeing from investors and some of the biggest players in the space to accelerate innovation is likely to result in a truly transformative year for B2B payments.