As we head into the back half of 2018 and begin to notice how quickly 2019 is sneaking up on us, it’s worth taking a moment to reevaluate the B2B payments space. If the last 18 months have taught us anything, it’s that B2B payments are seeing a flood of innovation, and that movement isn’t likely to slow down anytime soon.

For example, a lot of excitement has been generated around the potential blockchain has for B2B networks as well as the possibilities that could come through the NACHA Faster Payment Initiative, but these are just the popular kids in a crowd of truly innovative hipsters. Let’s take a look at some of the other interesting trends that are about to make waves in the B2B payments world.

Stronger AR Automation

A lot of the ERPs we’ve been talking with are in the process of trying to build out some component of their accounts receivable automation. Unfortunately, in almost every scenario, these companies are barely cracking the ice when trying to offer a complete solution.

The trend is most definitely moving toward offering a more robust AR platform. The days of half measures are no longer acceptable. The fact is though, most software companies don’t have the infrastructure to build out these features on their own, and that’s where your relationship with your payments partner can be leveraged to a greater degree.

Users of AR automation software are increasingly searching for more sophisticated AR tools in their platform of choice including invoice creation and delivery, electronic payment reminders, payment portals, collection communication mechanisms and easy cash application and reconciliation to general ledger.

More Dynamic Payment/Customer Portals

Speaking of payment portals, this area alone has seen a bigger push toward advancement. The biggest motivator for improving your payment portal is to provide a better payment experience for your customers’ customers. The end users are what drive adoption and retention, and if they can find easier tools elsewhere, they will.

Many of these users are looking for the ability to make multiple payments, whether they be through ACH, credit card, direct credit/direct deposit, check, virtual card, wire transfer, etc. But it’s about than just allowing more diverse payments. Today’s payment/customer portals allow users to grab statements, interact with the collections team to ask questions or file disputes, and interact with a customer dashboard for clear reporting metrics.

Growing Use of Virtual Cards

You may have noticed virtual cards in the list of payment types that users expect their payment portal to be compatible with. If this is a foreign concept to you, now’s the chance to learn a little and get ahead of the trend.

So, what is a virtual card? Virtual cards are single use cards. Once they’re used, they go away. Poof. There is no physical card. Virtual cards are created and authorized for use on a specific day, for a specific amount. This functionality makes them an extremely secure option for payments and is leading to a swiftly growing adoption rate by purchasers.

The Decline of the Paper Check

We know. The death toll for paper checks has been rung before. In fact, some industries and verticals are still seeing a lot of paper check payments; in some scenarios, there has even been a rise.

Despite this though, the trend IS shifting toward less paper checks being processed through AR platforms. Payments.com and NACHA even anticipate that ACH payments will finally surpass paper checks by 2020. So, if the trend is continuing, what are you to do?

Well, now is the time to start to bolster the payment options you accept through your platform. The need is still there to accommodate legacy payment methods, but you need to be prepared as end users make the switch to newer, more preferred payment options. Additionally, it may be advisable to integrate lock box services (safe holding locations used to initiate B2B payments) to help make broader payment offerings.

Level 3 Interchange Optimization

Stop us if you’ve heard of this before. Card brands offer incentive rates for passing data, and because of this, many corporate, business, commercial and personal cards can qualify for incentive rates from Visa and Mastercard.

It’s honestly surprising to see how many ERPs we speak to that are unfamiliar with this idea. As the trend moves toward more sophisticated payment gateways, companies are finding that their legacy technology is just not cut out for more modern trends, and that includes incentives such as this. There’s no way around it. Outdated technology just can’t support this.

What makes it even more tragic is the end result is you’re left overpaying on your credit card fees. So, while you may think you’re saving money by putting off that investment in upgrading your AR platform, you’re in fact costing yourself more money in the long run.

2019 – The Year of B2B Payments

Between these trends and the increased focus on payment verticals we talked about previously, the world of B2B payments is going to be an interesting space to watch as we steamroll toward 2019. As always, if any of the above trends trigger sympathy pains or heart palpitations, maybe it’s time to have a discussion about where your AR automation platform stands. I’d be happy to chat with you.

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