In centuries past, the process of paying for goods—or even carrying your own currency—was somewhat more complex than we’ve become accustomed to today. Take Russia in the Middle Ages, for example, where your purchasing power depended on how many squirrel pelts you had in hand when the time came to make a transaction. The thought of someone trying to get rich quick takes on a whole new meaning when you imagine the lengths they might have had to go to in order to catch their money before they could spend it.
Today, it’s safe to say things have changed. The abundance of ways for consumers to make payments online has ushered in an era of convenience that keeps us within touching distance of the goods and services we desire 24/7. The dramatic rise in mobile payments in recent years speaks volumes on how the way we move money is changing: in 2010, mobile payment transactions stood at $52.9 billion globally. By 2017, they’re predicted to be worth over $720 billion.
Moreover, innovation and evolution in B2C payment technology continues at pace. If you’re in any doubt about the potential profitability of a rumored deal involving newly-launched Apple Pay and Chinese juggernaut Alibaba, take a look at our recent blog post on the burgeoning E-Commerce landscape in China.
While consumers are clearly spoilt for choice when it comes to payment technology, the story for businesses is markedly different. As a Forbes article from earlier this year concluded, “Unfortunately, the business-to-business payment side of the house remains stuck in complexity, relying on manual and error prone processes.” It’s a commonly repeated sentiment when analyzing the state of B2B financial transactions.
Underlying the complexity businesses face when paying one another is the inadequate payment systems offered by traditional banks. According to one 2014 white paper, “Banks face a legacy of having chosen silos over integrated solutions, and integrating in half measures using strung-together platforms across payment types.” There is a sense that banks either lack the motivation to provide a more consumer-like B2B payment experience, or that they are simply not best structured for the challenge.
These dated transaction systems mean businesses are still bound by costly and time-consuming processes that demand massive amounts of manual input to work around B2B-specific issues relating to varied product catalogs, complex supply chains, custom pricing, and much more. For an idea of how much B2B transactions vary from their B2C counterparts, consider the findings of a survey by Oracle that claimed 28% of all B2B sales have five or more decision makers involved in the purchase process.
Naturally, there is a tidal wave of popular opinion that B2B transactions must change, and that their complex nature is no reason to shy away from finding a solution. Quite the opposite. As banks continue to display a “wait and see” attitude or the inability to tackle the problems, FinTech innovators have been hard at work to provide real people who run businesses with the kind of transaction experience they’re used to working with outside of office hours.
In a 2013 survey, 48% of companies in the U.S. said they planned to move away from making payments with paper checks and adopt electronic methods by 2016. The “method” they choose will be all important if they crave the most dynamic, all-encompassing solution possible. At Traxpay, we’ve developed a purpose-built solution to bring the ultimate resolution to the historic issues around B2B transactions. By ensuring every payment is built into existing corporate workflows, is data-driven, is able to adapt in real-time, and there are no circumstances too complex to derail the transaction. Or to put it another way, the dynamic, real-time nature of Traxpay software is almost as far removed from the infrastructure and antiquity of legacy banking systems as your e-wallet is from the squirrel pelts once favored in medieval days.