Do you remember the last time that you wrote a check or pulled out your credit card to make a purchase? For a majority of us, it’s probably been a pretty long-time. While technology has been rapidly changing the business to consumer payment industry, it’s also also being used in the business to business payment model so commonly that it’s changing the how business altogether. And, here’s just six examples of how that’s happening.
6 Ways Business 2 Business Payments is Changing Business
1. Rise of Purchasing Cards
According to the NAPCP, “A Purchasing Card (P‑Card) is a type of Commercial Card that allows organizations to take advantage of the existing credit card infrastructure to make business-to-business (B2B) electronic payments for a variety of business expenses (goods and services).”
Purchasing cards have become increasingly more popular in the 21st Century and are positioned to replace checks. Businesses are taking advantage of purchasing cards because funds are electronically funded and receipts are faster – both of which increase cash flow. Purchasing cards can also reduce costs by reducing invoice creation and mailing. Additionally, businesses can also increase sales and improve customer customer satisfaction.
2. More Affordable Options
Thanks to the advances in technology, such as the cloud or mobile apps, businesses have more than enough payments options that will save them both time and money. If you’ve been using the cloud, for example, then you already know how beneficial it can be in sharing documents, hosting meetings online, and sending out invoices. That same tech is being embraced for B2B payments where owners can automate invoicing by setting-up recurring payments, even for multiple businesses.
3. Catering to Millennials
The Pew Research Center has found that Millennials have replaced Gen Xers as the largest workforce in the U.S. That also means that we’ll also have a new generation of business owners and lessors who demand a new of way of doing business. Millennials are looking for new payment solutions to pay each other that revolve around mobile banking and cloud-based platforms that are fast and convenient.
4. Real-Time Notifications
Traditional payment systems, such as invoicing, has lead to a number of problems ranging from using too much to not getting paid on-time. Technology is helping to rectify these issues by providing real-time notifications. For example, when an invoice is now sent using invoicing software, you have the ability to track if the invoice has been received, is pending, or paid in-full, as opposed to waiting for a check to arrive in the mail.
5. Consumerization Is Becoming More Common
Just as services like Apple Pay is making it secure and convenient for customers to purchase items from their favorite stores, innovative B2B payments are also taking the consumerization approach. One such company is AribaPay. While the company tracks and manages billing, it also integrates with the global payments infrastructure of Discover Financial Services so that payments are quick, secure, and are delivered to the right place even before a payment is received.
6. Interest in Fintech Innovation Is Just Starting
All of the above points listed above are why the Fintech industry will boom in the very near future. As TechCrunch points out, “Mobile apps will likely see the largest amount of investment, and development will remain focused on creating a faster and more flexible platform to transmit funds.” There will also companies hoping to solve security concerns and globalize the the current payment structure specifically through with cryptocurrency like bitcoin or the blockchain.