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Top trends in consumer payments orbit around technology. But while items like mobile wallets are making headlines in the B2C space, B2B discussions tend to focus on the merits of moving away from legacy systems and embracing automation. Modern payment methods have “arrived” in the consumer market—and B2B operations are a few steps behind.
Players in the B2B market don’t necessarily use the same payment channels or processes as those in consumer e-commerce. That explains why they’re usually slower to adopt the technologies that take the consumer marketplace by storm. Still, understanding what’s happening on the B2C side can shed light on what’s shaping the B2B payment landscape.
Results from Blackhawk Network’s recent shopper study shows that 2015 is the “year of traditional, digital and mobile convergence in payments.” Highlights from How America Pays in 2015 include:
A June 2015 report from the Pew Charitable Trusts provides deeper insight into consumer prepaid card users. The report, Banking On Prepaid, reveals the following trends:
Research findings suggest that consumer payments today are about convenience and providing a mix of options so people can choose the payment method that aligns with their preferences or goals. More and more, payment preferences sidestep paper-based methods and rely on the digital realm. The same can be said about the B2B payments market, in which businesses are beginning to offer more flexibility in their partners’ payment options—with virtual payment cards or prepaid business cards, for instance.
And over time, B2B payment options are more likely to include alternative payment methods like mobile payments. As quoted in the CFO article, Payments on the Go, Thomas Husson, vice president and analyst at Forrester Research, says, “I strongly believe mobile payments are not just restricted to the B2C space. Plenty of opportunities will emerge in the B2B space too.”
The Internet Retailer article, Prodding the Switch to E-Payments in B2B E-Commerce, notes that transactions between businesses have relied mostly on paper checks or other forms of offline payments due to the “lack of reliable electronic systems that provided enough information to expedite payment data.” Today, companies have access to innovative payment processing systems, thanks to swift development in the consumer marketplace.
By leveraging the technology in B2C e-commerce, companies are enabling e-invoicing, e-payment, and other functionality to help them automate and streamline their processing, optimize their cash flow (e.g. pay invoices faster to take advantage of fast-pay supplier discounts), and enhance relationships with customers and suppliers.
It’s clear that physical currency and the other, more traditional, payment methods in either the B2C or B2B market aren’t going to disappear anytime soon. Even trend-worthy mobile payments are in their infancy, as many consumers and businesses are still trying to figure out how mobile payments work and how they can be applied to their purchases. Yet as technology changes, so do people’s habits and preferences—and that includes those of the decision-makers behind B2B payment practices.
For further reading, see Pymnts.com’s A Five Year Glimpse Into Consumer Payment Preference
Subscribe to our Inside WEX blog and follow us on social media for the insider view on everything WEX, from payments innovation to what it means to be a WEXer.
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