4 Reasons Why The Digitization of Payments is Imminent

The present-day corporate payments sphere can hardly be described as completely digital, but it’s getting there, however gradually. There’s plenty of compelling evidence that today’s procure-to-pay process decision-makers (and their supplier partners) are preparing to put away the paper and take at least most of their workflows online. By examining the “state of digital payments” in the B2B arena, it’s easy to see why the future of corporate payments leaves digital footprints. Here are the reasons why: 

1. Check, Please?

The latest research from AP Now found that 75% of payments made by businesses are done by check, and 51% of companies aren’t actively reducing their paper check volumes. This may sound counter to the digital argument, but it’s not. As PYMNTS.com points out in Baby Steps In Digital B2B Payments, businesses rely on paper—or more specifically, all of the information that comes along with it—to get business done, and today’s electronic solutions don’t necessarily provide all of this information.

Today’s solution providers understand this, and they’re focusing on making it easier for business to transition from paper-based to digital processes—not replace it in one swoop. They’re enabling AP professionals to keep using paper checks, for example, by incorporating them into a more digital workflow. In other words, technology (e.g. optical character recognition) can help expedite paper-based processes. For more detail on making the check-to-digital transition, read You Have the Technology, Rid Your Organization of Paper Checks.

2. Mobile Payments on the Horizon

Most B2C transactions, from buying a cup of coffee to making a mortgage payment, can be done on a mobile device or web-based service. There’s hardly a need to sit down at the kitchen table to thumb through paper bank statements and balance the (paper) check registry. Not so for many businesses; but decision-makers are taking the cue from their consumer personas and looking for ways mobile can support their business practices. Find out more in Exploring the Consumer-led Transformation of Corporate Mobile Payment Technology.

Indeed, there remain significant hurdles to corporate use of mobile devices for making transactions: legacy systems that limit complex mobile capabilities, outstanding security questions, global considerations related to data standards and regulations, and even issues with corporate culture and technology adoption. (Dig deeper in Common Obstacles to Modern Payment Processes.)

But companies are aware of these challenges and are working through them—thanks to industry partners. SaaS solutions, for example, help companies address internal system and resource limitations, and virtual credit cards help them manage cross-border payments. Similarly, there’s positive outlook—and the availability of solutions—for B2B mobile payments. Consider these stats:

• 78% of B2B companies believe mobile is the future of online commerce (Usablenet)
• B2B generates 19.4% of digital commerce revenue from mobile channels (Gartner)
• 52% of B2B executives said they were comfortable making business-related purchases on a mobile device (Forbes)

It’s clear that it’s not a question of whether or not mobile payments will become a reality in the B2B marketplace—it’s when. Explore this further in 3 Ways Mobile Technology Enhances the B2B Payments Experience.

3. Tech-Savvy B2B Procurement Leadership

Members of the Millennial generation have been shaking things up in B2C commerce for years now—but these 20-35 year-olds are coming into their own as decision-makers in B2B procurement and they are driving change in the way business is conducted.

A survey conducted by Sacunas uncovered that one-third (34%) of businesses have a millennial in charge of sourcing and purchasing. And just like they do as B2C consumers, they prefer digital channels to inform their decisions. They transact online, they confer with influencers in their social media networks, and they’re using their smartphones for business.

If many of today’s procurement professionals—and most of tomorrow’s—demand digital, their industry partners are going to have to deliver.

For more insights, click over to The Millennial Generation is Shaping the Future of Payments.

4. It’s All About the Experience

There’s another industry trend brewing—and it’s all about promoting customer satisfaction. If a partner can provide a seamless and even enjoyable path to purchase, it’s all the better for B2B customer loyalty and bottom-line growth. Companies are looking at their procure-to-pay process, from end-to-end, to ensure that customers can conduct business easily and in a way that’s convenient for them. Today, that has to include a digital component. Self-service is important to today’s payments professionals—it saves time and works well with their existing digital processes—and taking services online is truly the only way ahead. Explore this topic in Searching For A Customer Experience in the Payments Industry