Consumer perceptions and requirements have evolved, and people now look for immediate personalised payments updates. B2C payment technology has seen huge growth over the past decade with the invention of mobile wallets and new point of sale providers. The same cannot be said for B2B paytech - many businesses still rely on a physical paper trail and face-to-face communication. But, is this all about to change?

Disrupting the payment space

Digitisation is the first step to a modern B2B payment system with its opportunity for live communication and real-time feedback. Modern payments systems deliver easy to access, information-rich transactional details where both the sender and receiver are notified, and this gives businesses a whole new level of transparency. With increased visibility of their funds they can better manage their payments processes and forecasting, which in turn helps to manage risk. 

How data can be used to improve processes

Paytech also helps businesses with developing documentation and tracking their payment behaviour. When making payments, especially in emerging countries, reams of trade documentation are required in order to process them. Payment SaaS helps convert offline documentation to online so that it is easily and quickly accessible when needed. 

The amount of data available to analyse vastly increases with digitisation and this in turn enables businesses to gather insights and improve their processes and behaviours. In the past payment fees were blurred or buried within the small print but with digital payments they are now much clearer. Businesses are now able to track and analyse all of their payments so that they can make informed decisions on how they develop their infrastructure, technology and approach. 

The digitisation of the cross border B2B payments space

Cross-border B2B trade is an area of payments that is growing particularly fast. Historically cross-border payments fell within the remit of traditional banks who, while functional, were relatively slow in innovation due to their large-scale and complex system. As a result businesses have faced a lack of transparency with both pricing and FX fluctuations, high transaction costs especially with more exotic currencies, and long settlement periods. The payments landscape is changing. In recent years new players have entered the market to improve the system and offer competitive solutions, and B2B payment flows are expected to reach US$150t in 2022.

Paytech will also be used to create new revenue streams for SMEs who are faced with slow and expensive cross-border transactions. At SUNRATE for example we’re focused on helping small businesses access lower transaction costs through both international and local settlement networks, a benefit previously reserved for larger businesses. In this way the fund arrival time is reduced from a few days to same-day. This means clients can pay their out-of-country customers and vendors much faster with little to no friction points. A second benefit is that FX rates can be locked-in. Businesses cannot commit to a potential rate as the risk is too great and so it’s vital that prices are confirmed before transactions are made so that businesses can make informed decisions. 

The flexibility of card schemes

Card schemes are a further paytech development which can hugely impact business and offer greater flexibility with cross-border transactions. Cards now support multiple currencies and when making cross-border trades these benefits can be passed straight on to the customer. This allows businesses to focus on their customers without worrying about additional rates or FX fluctuations. Furthermore, there are the inherent practicalities of cards which enable businesses to make instant payments with real-time reconciliation. This in turn minimises transaction disputes before they arise and improves the customer relationship. 

The role of fintechs

When it comes to payment technology, fintechs often lead the way and have become an integral part of the payments system. It’s important however that the new technology is made accessible to a wide range of businesses and customers, and that’s why we’re now seeing an increased number of partnerships between fintechs and traditional financial institutions. They are now two sides of the same coin. While the traditional banks provide the infrastructure, fintechs are able to focus on providing technical support, product innovation and customer development. Fintechs like SUNRATE can work with banks to build bespoke platforms that enhance the bank’s capabilities and help them provide better products and services to their customers. 

A final thought

New technology can be daunting for businesses as many departments are involved in the payments process. However, while there may be concerns about disrupting workflow, ultimately the benefits will outweigh any costs. Paytech has the potential to transform the way businesses operate, helping them gather data on their transactions and have greater visibility over processes. Traditional financial institutions and fintechs must now work together to ease the payments burden on businesses and help them smoothly transition to the latest technology. This is how we’ll see our global economy flourish.