My last two posts have been about innovation in B2B payment technologies: Why innovation in this arena is so critical right now, and why open APIs are important in driving that innovation. Let’s now consider a third element of this discussion. What types of payment solutions are most likely to attract investment dollars in the years ahead, and why?
According to the 2013 Payment Innovation Jury Report, B2B/commercial payments will be second only to prepaid card solutions in drawing investment funding over the next five years. Respondents predicted that B2B payments solutions would receive even more investment than credit/lending and current account/debit technologies and services.
What’s most interesting about this prediction is that while consumer-oriented prepaid, credit and debit cards have already proven to be highly profitable for financial institutions, B2B payment solutions are still in their infancy—they only have profit “potential.” So what makes B2B payment solutions so attractive for investment?
In one word…frustration. Businesses are becoming increasingly dissatisfied with the outmoded, antiquated payment types provided by traditional channels. A real solution to this problem—an antidote to the sluggish, unpredictable, non-transparent, expensive B2B payments solutions commonly in use today—would create an enormous profit opportunity.
In the words of one Jury participant: “The innovations that will generate profits are those that solve a real pain point. So many innovations are solutions in search of a problem.” Simply put, innovation in B2B payments—particularly in the online arena—could solve a real problem, create real business value, and generate real revenue.
Participants in the Jury Report also believe that with an increasingly competitive market for payment solutions, “payments providers cannot ignore the growing demand for single integrated programs.” According to the report, “payment providers will take different approaches to achieving these integrated programs. Many established providers will initially try to adapt their legacy systems but slowness or inability to make them more easily accessible is likely to lead to failure in many cases. It will also create opportunities for new providers that invest in more flexible technology. The use of an open payments platform is seen by the Jury as likely to be more common than sourcing the best-fit third party application and then adapting it to a specific purpose.”
If internal development is not likely to lead to success and retrofitting a legacy platform is not the answer either, where will the innovation in payments come from?
According to the report, “The Jury believes that the best way for financial institutions to approach innovation is to partner with companies with innovative solutions or work with innovative start-ups.”
Innovative solution providers such as Traxpay, for example.
With our proven, real-world-tested B2B payments platform, our open philosophy and open APIs, and our ongoing dedication to innovation, Traxpay is uniquely qualified—and uniquely ready—to transform the promise and potential of accelerated, profitable B2B commerce into reality.