Has Cash Been Dethroned As King?

Everyone has heard the phrase “cash is king,” but how applicable is that today? Can we still honestly say that cash is supreme over other types of payments? Times have changed and so have the expectations of companies as well as consumers. Technology has had a tremendous impact on how we conduct business, and it’s about time that we adjust our expectations and think about what is the true powerhouse when it comes to money and how it is handled.

There’s no denying the fact that electronic payments are making an impact in the world of commerce. Thanks to the advent of electronic payments, consumers have a variety of ways to access and pay for products and services, and their options aren’t limited to any specific region anymore. It has leveled the playing field in the world of e-commerce, and as a result, the B2C e-commerce market segment is growing by double-digits year after year. Electronic payments—in the form of credit cards, PayPal, and the like—have been a key driver of this groundswell. It is not “cash”, but rather, it is knowing that the cash will be guaranteed at some point to the supplier that is the real driver of this growth. But what about B2B?

Sure, on the surface, it would seem that a B2B corporate buyer could just as easily use today’s existing electronic payments methods to pay for goods and services. But they don’t. The current methods of electronic payment fall very short of the unique needs of B2B transactions. On top of this, it is far too expensive for the receiver to accept this type of payment from a buyer. Think about how 3% to 5% in transaction fees wreaks havoc on already thin margins for B2B sellers or merchants. And it is even more expensive in the case of cross-border transactions.

The fact is, B2B transactions are much more complex than B2C transactions. For example, in the B2B context, there are multiple business rules to manage for each company involved in the transaction. There are specific workflows that are unique to each and every company too. Then you toss in the IT connectivity requirements such as ERP to ERP, Procure-to-Pay, Order-to-Cash, CRM, and related back office systems that need to be in the flow, and you start to see where things get really exciting. If that was not enough, there is also the challenge of connecting the data related for these transactions to the actual payment itself—like purchase orders, invoices, contracts, and discount schedules, to name a few. Traditional B2C electronic payment methods simply fall short of handling these critical requirements, and as such, are unusable in the B2B context. So what’s the answer?

B2B corporates need an electronic payment system that can handle payments any time, any place, any way, anyhow. And one that can aggregate rich data into the transaction and connect with their existing back-office IT systems without disrupting existing workflows. They also want a pricing model that is cost effective and transparent. But most of all, B2B sellers want to make sure they get paid – without chargebacks, delays, or risk of fraud and loss. Certainty of payment is the most prominent concern for B2B companies, and as the world of B2B shifts online, this concern is even higher.

Traxpay was built to address the unique requirements of B2B payments, and addresses the gaps that exist in the typical electronic methods on the market today. Traxpay is revolutionizing how B2B companies pay and get paid, and is working with customers and partners on a global scale.

To answer the original question, it’s very apparent that cash is no longer king. Rather, it is now certainty of payment that is critical, along with ironclad protection against fraud and loss for both buyers and sellers involved in a deal. And for B2B transactions, it is more than the payment itself that has to be considered. It is the payment, plus rich data and workflow integration—all working in harmony—that is key. As B2B companies continue to look globally and online for new markets and new customers, electronic payments – not cash – will be a critical enabler to new and accelerated business. It’s only a matter of time before cash becomes a thing of the past.

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