In B2B Finance, Digital Solutions Still Need Nurturing

Will there ever be a day when B2B financial professionals manage all of their transactions using a mobile device? Maybe the better question is, “will they want to?” Technology, from innovative e-invoice solutions to automated payments, is permeating the B2B accounting and financial services space. On the whole, employees are eagerly adopting digital tools for their cost-savings and the impact they’re making on productivity. Yet uptake of mobile functionality, specifically, is lagging behind.

Weak Interest in B2B Mobile Payments?

The professional association for the commercial card and payment industry, NAPCP, and TSYS, credit card processor, merchant acquirer and bank credit card issuer, released findings from their illuminating 2016 study of commercial card and payments professionals. Their results suggest that, to some degree, all forms of digital (non-traditional) solutions face the same adoption challenges. Various products in the categories of P-card and T&E card programs, electronic accounts payable, alternative B2B payment, expense management, mobile payment, and account servicing through mobile notifications, are perceived to fall short of potential—due to respondents’ concerns about controls and compliance, security, monitoring and controlling spend, and tracking receipts.

Only a slim 10% of respondents indicated they were likely or very likely to use mobile payments in the B2B space. What’s more, they were undecided when asked about the likelihood that their organization would adopt alerts (38%) or two-way SMS (39%) in the future. Their perceived drawbacks continue to outweigh their benefits for most (potential) users. These benefits, which are reviewed in 3 Ways Mobile Technology Enhances the B2B Payments Experience, fit into workers’ existing digital lifestyle, expedite paper-based transactions, and streamline the receivables process. Even so, at this time, most financial professionals are just not “all in” with the concept of mobile payments and related services.

Breaking Barriers to Widespread Mobile Adoption

As the NAPCP/TSYS research confirmed, many commercial card and payments professionals have significant security concerns when it comes to replacing traditional processes with digital ones. It should be noted that other factors hindering program success include employee use of personal cards and lack of upper management support. All three of these concerns, say the study analysts, can be addressed with increased solution awareness and education, especially related to overcoming supplier resistance.

For insights, see 3 Tips for Smoother Supplier Onboarding and Technology Enablement and Supplier Relationships Believed Central to B2B Customer Engagement

With security being the central issue determining decision-makers’ trust in digital and mobile tools, it’s possible that tokenization may emerge as the long-term solution to widespread technology adoption. (Take A Brief Look at Tokenization in the Payments Industry for answers to common questions about this route to achieving payments security.) Tokenization is being explored today with increasing interest from industry leaders—and it’s making progress.

As explained in B2B Payments, With Tokens And Smarts, on PYMNTS.com, blockchain specialist Smart Token Chain recently conducted its first transaction across the Ripple Network, a distributed ledger enabling banks to send real-time payments. The significance in this news is that tokens can be used to enhance B2B financial operations like managing payables and receivables across corporate credit—and we’ve now witnessed a successful attempt. As stated by Smart Token Chain executives in the article, “the layers of security tied to the blockchain establish what can be thought of as closed-loop transactions, and the emergence of mobile payments also allows for biometrics, such as fingerprints, to make sure that identities, transactions and the terms of those transactions are all safeguarded.”

A Bird-in-the-Hand: Virtual Card Numbers

Tokenization may become the “secret” to driving mobile payment adoption within B2B circles, but until that time comes, payments professionals can turn to VCN (Virtual Card Number) solutions for the payments security they’re seeking. In fact, VCNs address all of the digital payment concerns expressed by the NAPCP/TSYS survey participants: controls and compliance, security, monitoring and controlling spend, and tracking receipts.

Here are the key security-focused reasons VCNs are becoming a popular digital B2B payments solution:

• Administrators can set precise controls for each transaction related to payment dates, spend amounts, and merchant categories
• A VCN is used for a single purchase and becomes invalid after use
• There is no physical card that can get lost or stolen
• VCNs are processed through the major credit card networks
• Transactions don’t require banking information to be exchanged and/or maintained between the buyer and supplier

For more about the benefits of using VCNs, see 5 Reasons Your Suppliers Love To Receive Virtual Payments and Four Barriers to E-Payments Adoption (and How Virtual Cards Overcome).