The last decade has seen massive changes in payments – from the advent of digital wallets and contactless transactions through to the rise of crypto and blockchain-based solutions.
The past two years have been especially transformative for the payments industry, given the huge switch to online and digital business that took place due to the pandemic.
Brandon Spear, CEO of TreviPay, explains why embedded payments are the next step in the ongoing payments revolution – and the benefits that will accrue to businesses around the world.
B2C businesses were quick to adopt embedded payments to accommodate consumer demand for easier, convenient transactions. In fact, Bain Capital predicts embedded payments could be worth up to $7 trillion by 2030 as part of a wider embedded finance transformation.
B2B businesses, who were lagging, needed to rethink their business models and buyer experiences, including making online payments a reality.
The payments and accounts receivable (AR) processes for B2B businesses weren’t necessarily broken, but the pandemic made it clear that there were significant hurdles to overcome to go fully digital.
For example, in many instances back-office staff began working remotely, making it harder to receive and process paper checks.
Similarly, many buyers began working from home, making it difficult to know where to send paper invoices. Many B2B businesses had to change their entire go-to market sales strategies. This meant pivoting from in-person meetings to virtual ones and finding convenient ways to connect buyers to a place where they could conveniently transact online.
“The added value generated through embedded payments increases dramatically in the B2B space.”
To remain relevant, B2B businesses turn to embedded payments, which aim to make payments frictionless and painless by reducing the time and effort buyers need to invest in transactions.
An effective embedded payments process cuts down the number of steps needed in a transaction, including credit approval, authentication, invoicing, processing, and settlement. And for B2B companies especially, it’s increasingly important that buyers have the option to pay on terms, or buy now, pay later, as part of their online transaction.
B2B: embedding value
In How to Build Faster, Smarter B2B Payments Systems, we focus on the added value of embedded payments for buyers and sellers in the B2B space. Whereas consumer payments involve a single stakeholder using a single payment method, such as a credit or debit card, B2B transactions can involve a whole range of stakeholders, from purchasers to accounts payable and procurement.
B2B transactions are also typically executed over a far wider range of payment types, from trade credit to corporate purchasing cards, personal credit cards and others. By embedding corporate purchasing into the process of ordering goods and services, companies make buying easier, enhance loyalty, and drive repeat purchases among customers.
Even better, the time taken to transfer funds between companies is reduced and cashflow is improved.
“Three-quarters of today’s CEOs say their business model will be unrecognisable in five years’ time.”
These factors are going to become increasingly important as businesses are forced to go digital or be left behind. Levvel Research estimates that 90% of SMEs are now in the process of digitalising their AR functions.
As this process continues, the expectation of smoother, faster, and safer B2B transactions is only going to increase – as well as (needless to say) the capacity to buy any time, from anywhere, and over any kind of device.
What’s more, the open finance revolution, in which companies share access to data and their digital platforms with trusted third parties via secure API architectures, will only enhance demand for reduced payments friction.
Forrester Research reports three-quarters of today’s CEOs say their business model will be unrecognisable in five years’ time. In part, that’s because these CEOs recognise that today’s model, requiring multi-factor, multi-stage authentications, long settlement times of up to five days and slow fulfilment is unsustainable.
In its place, we are going to see faster, safer ordering and invoicing, and more rapid fulfilment of orders, as well as instant settlement of transactions.
Seen in this context, embedded payments are more than a technological development or a convenience factor – they are a necessity if the digital revolution is to fulfil its potential.
Download our new e-book, “Embedded Payments: How to Build Faster, Smarter B2B Payments Systems”
 See PayPii: “Embedded finance set to disrupt fintech industry” – Dec 5, 2021 https://paypii.com/embedded-finance-set-to-disrupt-fintech-industry/
 See “2020 Payables Insight Report”, Levvel Research: https://cdn-new.levvel.io/resource-assets/2020_PayablesInsight_3.26.pdf
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