Innovations: Modernization of B2B payment methods
B2B payment platforms emphasize payment delivery speeds and offer faster payment rails, writes Omri Mor, co-founder and CEO of Routable, in the PYMNTS e-book, “Endemic Economics: 32 Payments Execs on the ‘Next Normal’ That Never Happened.” And real-time payments to suppliers and partners can have a profound impact on business growth far beyond the gig economy.
Over the past decade, peer-to-peer and peer-to-peer payments have seen significant innovation in the way individuals use technology to send and receive funds. Whether it’s splitting a dinner bill, collecting monthly rent, or choosing to buy now, pay later (BNPL) for a wardrobe upgrade, it’s never been just as easy for consumers and their peers to transmit money electronically. Perhaps the most impressive innovations seen in the peer-to-peer space are the speed at which individuals can send and receive money and transfer funds to their bank accounts. Many popular P2P payment apps offer recipients the ability to receive funds and transfer the money to their bank account for immediate use with just a few clicks.
In 2022, the same applies to B2B payments. With the rise of digital first payments accelerated by the COVID-19 pandemic and the growth of industries such as the Gig Economy workforce, payment solution providers have innovated payment methods to adapt. to the change in the way companies plan to pay their trading partners. According to a survey commissioned by the Federal Reserve Banks in 2020, many businesses have already begun to implement faster payment solutions such as Same Day ACH or push-to-card and for those without 9 in 10 companies expect to be able to do so by 2023.
We are now seeing B2B payment platforms emphasizing payment delivery speeds and offering faster payment rails to businesses that value fast payment delivery from vendors. For industries such as marketplaces, real estate, and gig economies, businesses are beginning to realize that by making payments to their business partners’ bank accounts in real time, it can have a profound impact on the growth of their own business. Suppliers and freelancers love nothing more than getting paid quickly, and the ability to offer instant payments serves as a competitive differentiator for these businesses, allowing them to improve their relationships, grow their supplier network and increase retention.
One of my favorite experiences has been helping our real estate clients pay agents faster than they could before. Paying agents on time is a fundamental part of the real estate business payment ecosystem and more often than not we see brokers falling behind on payments. Payments initiated over the weekend can often cause delays when using traditional payment methods, creating a ripple effect on all of your debts. For Routable customers who made the decision to invest in accelerated payments, the worry of paying agents within the required window disappeared almost immediately. We took the stress out of the process and brought joy to sellers. It was an amazing thing to watch unfold.
In today’s world where individuals can receive funds through online applications such as PayPal, Venmo, and Cash App and instantly transfer that money to their bank account for immediate use, businesses expect the same thing. For 2022 and beyond, we will continue to see businesses demanding faster and more reliable payment methods from providers. Payment solutions that can scale and offer their customers the fastest means of payment in the industry, such as RealTime Payments (RTP®) or payment options such as push-to-debit, will experience the stronger growth because of the strategic impact they will have on their customers. ‘ businesses.