There is simply no shortage of benefits to embracing today’s most innovative B2B corporate payment methods, including virtual payment cards. They’re usually more cost-effective and less labor-intensive than traditional payment options such as checks and ACH, and their electronic workflows enable tighter controls and enhanced security, not to mention cleaner, more usable data.
And the big value proposition? Replacing manual processes with technology-based automatic processes allows employees to focus on business-building activities—making the financial accounting department a more strategic partner in the companies’ operations.
Despite the many advantages, some businesses haven’t given this solution a try. What’s stopping these companies from adopting virtual payment processes? Here are the main obstacles standing in their way:
Existing solutions that have served companies well for years tend to have a strong grip that outlasts their value. In fact, one-third (34%) of participants in a 2014 Harvard Business Review Analytic Services study measuring the impact of new technologies (The Digital Dividend: First Mover Advantage) say that legacy technologies get in the way of innovation. It can be a challenge to embrace a new approach and replace a system into which substantial financial resources have been invested.
When asked about using a digital process that doesn’t rely on physical plastic or paper, the late adopters of new technology cite the risk of intellectual property theft, data loss, and any number of privacy threats as the big red flags. They’re likely not aware that virtual card payments are sent through the same credit card network most companies use to process their B2C or B2B plastic card payments—a security fear they’ve already overcome.
Disconnected Business Partners
Suppliers using a paper-based invoicing process typically prefer in-bound payments to be paper. They may not have invested in updating their system to accommodate electronic payments. Technology limitations can keep customers from exploring more up-to-date payment channels.
Forty four percent of participants in the Harvard Business Review Analytic Services study say they need more cultural flexibility to adapt and take advantage of new technologies to drive new ways of doing business. As easy as it might be to build a compelling business case in favor of a new method, many accounting professionals come up against a prevailing attitude that as long as the “traditional” ways of operating are still working, there’s no need to rock the boat.
The Virtual Way Ahead
As with the widespread adoption of any technology-based innovation, virtual card payments are making their mark on the industry. More finance and accounting professionals are realizing that to remain competitive—or to build a competitive edge—their business processes need to reflect what’s newer, faster, and more efficient. They are investing in tools that bring their teams closer to paperless processes for a range of reasons, including the:
- Use of digital technology in their personal lives has raised their comfort level with technology-based solutions
- Influence of more tech-savvy employees who are more open to leveraging modern ways of conducting business
- Need to meet the demands/preferences of new suppliers, partners, and customers who want to use digital payment methods
- Successful implementation of electronic process and/or mobile and cloud-based systems in other areas of their business (e.g. HR, marketing)