For a long time, the conversation around B2B payments has focused on the lack of consumer-like convenience in evidence when buyers and suppliers transact with one another.
The prohibitive factors inherent in the B2B payment process – from outdated banking infrastructure to country-specific regulations – have been a major driver for the emergence of FinTech start-ups looking to make progress on the problems.
As we hit the mid-point of 2016, however, there is perhaps a tentative turning of the tide in the perception of how fit B2B payment solutions are for purpose.
Financial industry commentator Frances Coppola believes the “expensive, time-consuming and inefficient paper chase” is “about to change”, claiming that FinTech companies are now on the brink of major breakthroughs in cross-border B2B payments. She writes: “2016 should see them beginning to provide serious challenge to banks, both at the customer interface and in the back-office processing of international payments.”
Elsewhere, CSI Enterprises acknowledge businesses now have “more options than ever” in the payment realm, while CPO Rising say electronic payment solutions have “matured and advanced significantly in recent years, lowering many of the major barriers to driving adoption.”
With countries such as the UK now implementing faster payments as standard, and others set to follow, the recurring message seems to be that the kind of B2B payments utopia we’ve been dreaming of isn’t here yet, but we’re at least knocking on heaven’s door.
Much of the credit for this mood swing must surely be directed at FinTech as a whole, with start-ups bringing into laser focus the underdeveloped nature of the bank systems that B2B payments have been bound by for so long.
As the journey to identify and implement the best possible technologies for B2B Payments continues, some are turning their attention to how other emerging areas of technology could become relevant in the future.
Among the topics on the table is the ongoing evolution of the Internet of Things (IoT). For the uninitiated, the term refers to a phenomenon we are already experiencing – with devices such as smartwatches and fitness trackers recording and sharing data online. An estimated 50 billion devices will be “connected” by 2020, compared to just 2 billion in 2011. Fridges, traffic lights, toothbrushes all jumping on our Wi-Fi – and if that sounds far-fetched, just consider the lengths you once had to go to in order to navigate to an unknown address or rent a movie.
Current and projected uses for the Internet of Things. Source: http://postscapes.com
Exactly how the IoT will impact B2B payment processes remains to be seen, but – for example – it’s not hard to imagine how useful fully automated transactions could be on the supply chain. There’s certainly a degree of optimism around the role businesses may play in shaping the IoT as it evolves, with one blogger claiming that, “Rather than being mere bystanders in the ever-expanding IoT revolution, more often than not, B2B companies will be the driving force behind it.”
Elsewhere, in The Paypers’ report from earlier this year about upcoming payment trends, one contributor notes: “In the USD 700 trillion of B2B payments globally, connecting the many buyers, sellers, and providers of payments, financing and software solutions might seem an impossible task. And yet, we have the example of the Internet. Tactical business needs are aligning with cloud-based technology platforms and solution options. And alignment with standard frameworks, notably around ISO 20022, offers the potential for faster and wider scaling of such solutions, with lower investment. An Internet of Payments, as it emerges, will reshape the B2B payments industry, and much more besides. It will likely develop quite suddenly as a mass phenomenon, much like the Internet in the mid-nineties.”
And while the writer does concede that coining a phrase such as the “Internet of Payments” is less important than working out the questions of when and how it will emerge, the fact it is now becoming more frequently discussed lends credence to the idea that the whole conversation around B2B Payments is perhaps becoming more focused on the possibilities of the future than banking’s sins of the past.