Payments Orchestration – Payments orchestration allows businesses to route payment flow from all its payments service providers (PSPs) and payment methods, into a single place. Where previously businesses relied on manual processes to manage each individual account, a payments orchestrator offers a single cloud-based platform, through which a business can manage all its payments, deal with fewer providers, and significantly reduce the number of failed transactions.
B2B Buyer and Supplier experience – Despite a considerable rise in virtual card use in Europe for B2B payments, this popular business payment method can still become more efficient and easier to use, as many benefits sway in favour of the buyer.
Currently, buyers and suppliers must still access multiple portals to track payments manually. Technologies like straight-through processing (STP), which automate the payment process through next-gen API integration to support real-time payments and merchant enablement, will become more widespread.
As STP can integrate with enterprise resource planning (ERP) systems and platforms to support reporting and reconciliation for both accounts payable and receivable, we’re already seeing innovative corporations using the technology.
PCI scope is significantly reduced as well, as neither the buyer nor the supplier handles the raw card details. It also became possible to process large ticket transactions without worrying about acquirer ceiling limits, all of which extends working capital and ensures prompt payment. STP itself is not a new technology, yet 2023 will see it finally be put to use in the way it was intended – to automate and secure commercial card transactions for both buyer and supplier.
Greater collaboration – Collaboration between schemes, banks, fintechs, and back-office system platforms will drive growth in 2023 for both B2B buyers and suppliers. Integrating payment solutions with back-office systems will remove unnecessary processes and ensure payments are aligned with all business areas, such as accounts payable and receivable.
Economic strife – Rising inflation and recession continue to impact businesses globally, regardless of a company’s size. Margins will take a hit, forcing cashflow to become more crucial than ever. Technologies that can ensure prompt payment for suppliers and enable more cost-effective processes for buyers will be key to the survival of businesses in 2023.
We can also expect more businesses to use commercial credit cards that allow these organisations to extend their days payable outstanding (DPO) to suppliers, thus maximising the working capital while minimising the supplier’s days sales outstanding (DSO), and removing the cost of cash collection. With many economists predicting interest rate potentially of 6%, commercial cards can offer a flexible and faster payment option.
Buyers using commercial credit cards should look to integrate digital B2B payment technologies, such as STP, as part of their standard offering. Buyers that can offer smarter and more efficient payment processes that realise process efficiencies and reduce overall costs will be able to pass the savings onto their own customers and compete on price in their own markets, while maintaining under-pressure profit margins.
Suppliers can succeed by offering a variety of digital payment methods. This ensures clients can pay via their preferred payment method to give themselves the best chance of securing customers, and then get paid quickly to create cash flow into the business. Where commercial cards were once considered too expensive, now the method has become popular amongst corporate buyers. Suppliers ignoring such requests from buyers risk losing tenders or cashflow to bad payers.
Catalysed by the pandemic, the last few years have witnessed immense innovation and digitisation in the B2C payments market. 2023 will mark the year that B2B payments experiences a similar transition. Upcoming global economic challenges are set to put all businesses under huge stress, so businesses must identify key trends and opportunities to find ways to reduce costs and improve the customer experience. Next year, more than ever, this will be essential for businesses to overcome continued challenges and drive sustainable growth.
Andy Downman is Commercial Director at Adflex. He has over 17 years of experience in the payments industry and specialises in the B2B issuance and acceptance of commercial credit cards and the related cloud-based technology for accounts payable and receivable.
Adflex has been at the heart of the B2B fintech revolution from the beginning. We are known for fostering innovation and helping companies harness the power of digital payments. Our technology and expertise bring together buyers and suppliers to make transactions fast, cost-effective, and straightforward to manage. We take the pain out of the supply chain by delivering seamless and secure payment integration that adds value to both buyers and merchants.
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