As B2B firms continue moving toward digital payments, new research shows they’re using that newfound functionality and applying it to other strategies and solutions as well.
For example, 65% of technology firms saying they have adopted automated accounts receivable (AR) payment tools, findings from the Innovating B2B Payments Report done by PYMNTS in collaboration with i2c Inc. show.
It is worth noting that tech firms ranked in the middle of the pack among five industry sectors surveyed, below energy firms (71%) and advertising firms (68%) but above healthcare (56%) and construction (48%).
“The shift to digital B2B payments went from being a nice-to-have before the pandemic to a need-to-have last year and is moving toward being a real catalyst in many ways for changing how businesses operate,” Jim McCarthy, president of i2c Inc., told PYMNTS.
He noted that payments have been late to evolve and have been dominated by paper and Automated Clearing House (ACH). Then, suddenly, businesses had to make the shift to survive. Once these businesses transitioned AR to digital, the impact began to move to other parts of their operation too.
Speed and Efficiency
That introduces new technologies to their operations. Business payment processors may be tapping technologies such as artificial intelligence (AI) and machine learning (ML) to reduce frictions or boost the speed of incoming and outgoing funds.
Modernizing legacy infrastructure and manual payment processes via application programming interfaces (APIs) and AI can allow businesses to offer innovative payment experiences.
Using virtual cards for B2B payments can speed payments and add security, for example. They can also enable firms to more successfully compete in the expanding global B2B space.
Integrating tools and technologies such as these virtual cards or AI can help businesses add more speed and efficiency to their commercial payments.
In fact, PYMNTS data show faster processing speed was the No. 1 ranked AR benefit from emerging technology, according to firms that are now using it.
“If you pull back, you realize it is less about integrating separate tools for commercial payments and can begin to see how we are rewiring businesses. Their instrumentation changes,” McCarthy said.
He explained that data streams begin to impact marketing, acquisition and loyalty: “It is quite remarkable how the virtual card — or digital-first, more broadly — is at the heart of so many major innovations.”
Beyond replacing outdated, manual payment processes, digital credit solutions can provide other benefits to businesses.
PYMNTS data show that firms report many benefits from emerging technology, beyond the faster processing speed. These include improve team efficiency (79%), better customer experience (75%), saved operational costs (72%), daily sales outstanding (DSO) improvement (62%), head count reduction (60%) and collections improvement (49%).
McCarthy noted that providers may start servicing a business with accepting digital payments and then suggest other upgrades as they learn about the business.
“This leads to insights and opportunities for extending lines of credit to not just the business but to their employees too. This brings in new use cases like loan disbursements and instant payments to support things like earned wage access.”
What began with a modernization of payment processing can lead to a rethinking and upgrade of the rest of a business’ operations, boosting efficiency and providing other benefits.