Growing Demand for Real-time Digital Payments by B2B Customers 

Digital money is on the move! The currency issued by the treasury department passes through thousands of hands before it becomes worn, is taken out of circulation, and is replaced with new money. However, with the expansion of online purchases, mobile banking, and peer-to-peer payments, money moves from computer to computer. Many of the payment processes that are most familiar to consumers and businesses are rapidly being replaced by digital transactions conducted on computers, smartphones, and other devices. For many people, cash, plastic cards, and checks are no longer the primary payment methods for transactions. 

B2B Customers Want Benefits Similar to Consumers
Businesses continually identify opportunities to operate more efficiently and streamline processes. Transitioning into the digital space enables companies to benefit from advanced cybersecurity, customer data technology, and system integrations. During the pandemic, consumers gradually begin to shift from cash to digital payments. According to Visa, seventy-six percent of adults globally have an account with a financial institution or mobile money provider—up from fifty-one percent in 2011.

Now, business customers are pressing for similar types of real-time transactions commonly used by consumers to engage in commerce. “If you think about the way you shop online for personal things to pay your friends using a mobile-to-mobile app, those expectations are finding their way into the business environment, “says Aaron Press, research director worldwide payment strategies at IDC. 

Growing Interest in Digital Payment Technology
Additionally, an MIT Technology Review surveyed business leaders who operate small, medium, or large global operations and discovered a keen interest in digital payment technology.

  • Thirty-six percent of respondents are just beginning digital payments
  • Forty-six percent expect to expand their offerings in the next 18 months
  • Thirty-seven percent are exploring international transactions
  • Eighteen percent are venturing into cryptocurrency

Business-to-Business Benefits of All-Digital Payments
Seventy percent of businesses participating in the MIT Technology Review cited that companies enhance the customer experience by supporting multiple payment options that save customer’s time. When the same concepts are applied to business transactions, identified specific tangible benefits.

  • Benefits from operational improvements (48 percent)
  • Reduction in processing costs (37 percent)
  • Expanded options for securing payments (36 percent)
  • Personalized offers to customers (35 percent)

“Digital payments are more efficient and dramatically reduce errors, says Press. “You’re much less likely to fill out something wrong because there are checks and balances within the system. You will get much better data, and you can apply analytics against your accounts to understand your cash flow better and to optimize payments.”

Barriers that Prevent Companies from Going All-Digital
In commenting, Press says inertia is the primary reason businesses fail to move to digital payments. “Sometimes recognizing the value of something new is hard when what you’re doing is working just fine. Companies need a compelling reason to change.” Survey respondents also mentioned additional reasons preventing or delaying them from going all-digital with payments.

  • Forty-two percent are afraid of increasing processing costs
  • Twenty-four percent cite building a new secure network
  • Forty-two percent mentioned coping with downtime
  • Thirty-two noted the challenges of handling international transactions

Fear of Cybercrime Tops the List 
However, the most significant barrier that prevents companies (59 percent) from expanding into digital is cybercrime. Paul Fabara, executive vice president and chief risk officer, Visa says, “Cybercriminals have access to the same technology as many companies—in some cases better. We’re one of the most protected networks, but we’re attacked thousands of times a week.” As new buyers and sellers entered e-commerce during the pandemic, the problem became progressively worse.

Press notes that many cybercrimes can be prevented if businesses use advanced encryption features and multifactor authentication because the company feels it hurts the user experience or makes transactions more difficult. If these concerns prevent businesses from transitioning to digital commerce, he says outsourcing payments may be the answer. Small operations without the technical capabilities required to protect business and customer data should check this option.  

While cybercrime is a reality, Fabara believes digital payments remain the best option since they give all parties greater transaction control. “To remain competitive, digital payments are the one thing you want to buy into as soon as possible.”.  

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