Companies Focus on Secure and Efficient Automated B2B Payment Solutions

Support for B2B Electronic Payment Systems Rises

Several factors are making payments costlier and more complex, according to the 2018 B2B Payments & WCM Strategies Survey Report. These include the rising use of multiple currencies in a global market, maintaining numerous bank relationships due to lack of widespread global support for some banks, and payment volumes often exceeding 10,000 per month for nearly half the companies surveyed. As a result, 84 percent of organizations surveyed are pushing for automation to help reduce high payment costs, and 64 percent are currently using same-day payments and/or other faster payment methods.²

Similarly, 60 percent of corporate respondents say it’s important for their banks to invest in mobile B2B payment solution technology. The report notes that companies surveyed are satisfied, overall, with the ways banks are investing in and incorporating innovative B2B payment solutions.³ Currently, automated clearing house (ACH) payments are the most commonly used platform for B2B payments, followed by the Clearing House’s Real-Time Payments (RTP) and SWIFT’s gpi platforms.⁴

Efficient Automated Payment Solutions Top of Mind for B2B

For accounts payable, improvements in efficiency and productivity were top drivers of automation for 49 percent of respondents, ahead of both security and cost.⁵ Just over a third of those surveyed expect automated B2B payment solutions to increase the efficiency of accounts payables and accounts receivables equally.⁶

Automation of B2B payment solutions is expected to enhance efficiency and productivity by reducing time-consuming manual tasks and human error, like duplicate payments or misfiled invoices. Faster and more accurate payment processing can lead to reduced processing costs, allow greater visibility into cash flow, and optimize working capital.⁷ Digitization of data may also keep systems better organized and able to quickly provide more discrete information, furthering the ability to track spending and capital.⁸

According to Strategic Treasurer’s report, automation of accounts payable and receivable workflows can cut out days or weeks from the procure-to-pay and order-to-cash cycles, thus allowing more control and transparency of working capital.⁹ One mining company, for example, reduced invoice turnaround approval from 18 days to a few hours by using automation, which also led to a 6 percent increase in early-payment discounts.¹⁰

Security Integral to B2B e-Payment Solutions as Fraud Risk Grows

While the promise of efficiency and increased productivity may be central to many corporate B2B payment solution initiatives, businesses are increasingly concerned over security threats. In Strategic Treasurer’s 2018 Treasury Fraud & Controls Report, more than three quarters of respondents say the perceived threat of fraud has increased over the past year.¹¹ This aligns with BottomLine Technologies’ 2018 State of Treasury Fraud survey, which found that the frequency of ransomware attacks has grown by more than 300 percent between 2017 and 2018 alone, along with a 40 percent increase in fraud activity against the treasury environment since 2016.¹²

Another BottomLine Technologies report found that there are 10 times more cases of fraud associated with paper checks than ACH and wire transfers combined, and checks are responsible for more than twice as many fraud incidents as credit cards.¹³ Similarly, a survey by the Association of Financial Professionals (AFP) found that 74 percent of respondents reported check fraud while only 48 percent experienced wire fraud.¹⁴

Accordingly, the overall safety of new B2B payment solutions is top-of-mind for banks and non-bank companies alike. Strategic Treasurer’s 2018 B2B Payments & WCM Strategies Survey Report notes that 63 percent of banks and 65 percent of non-bank respondents said security concerns have a strong or very strong influence on their planned payments technology spending. Similarly, nearly half of corporates say their most important B2B payment initiatives for 2019 are centered around security and fraud control.¹⁵

According to the U.S. Federal Reserve, key steps to improve security are centered around analyzing and assessing potential vulnerabilities and risk prevention strategies. The Fed also recommends establishing and engaging in industry workgroups that seek to reduce the cost of mitigating payment security vulnerabilities.¹⁶