B2B Payments Digitize Amid COVID-19

Many businesses were turned upside down during the early months of COVID-19, and merchants had to change the way they interacted with their customers and vendors. The closure of brick-and-mortar offices compelled countless B2B organizations to seek out web-based treasury solutions and move away from the paper-reliant systems that was the norm.

Change has been traditionally slow to come to the B2B world, with many businesses set in their ways when it comes to how they send out bills, disbursements, and invoices, or how they accept payments from partners or vendors. Paper-based payments — not just paper checks, but also invoices or other documentation involved in B2B transactions — have become so ingrained that it took the pandemic to highlight how reliant many firms are on manual processes.

B2B Moves to Digital Solutions Out of Necessity

Pymnts.com spoke to Katrina King, EVP of Treasury Management at Cadence Bank, and Bridgit Chayt, SVP and Director of Commercial Payments and Treasury Management at Fifth Third Bank, to explore how business needs are changing and what it means for the future of the B2B industry.

Industries like manufacturing, traditionally conducted payables or receivables in person, but the pandemic forced these companies to work quickly to establish a digital means of supporting cash flow to keep their business viable.

“I think the COVID-19 pandemic has forced all of the … companies that had the luxury of an in-store presence and connection with their clients to rethink that to help replace the revenues,” King said. “A great example of that is being able to accept credit cards online versus just with a card swipe reader, or to electronically make payments with their trading partners in a more automated fashion than writing a paper check.”

Businesses are beginning to see the benefits of adding automation or other digital capabilities into B2B payment processes, including the use of real-time or instant payments to help further advance disbursement speeds. Interest in such methods has picked up during recent months, according to Chayt.

“We have seen a lot more interest in accelerating either pilots, proofs of concept or rollouts of real-time payments,” Chayt said. “But in addition, real-time visibility into cash, and real-time integration into banks and partners, [is] the real-time theme we are seeing, whether that is with APIs or open banking. That will continue to push the payments landscape into areas where we can take the pressure off of those long-standing payment rails, such as wire and check, and place more value on the information or messaging side that follows those.”

Businesses are unlikely to fully return to pre-pandemic operational norms anytime soon, meaning that embracing digital solutions will be key.

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