Benefits of Going Digital with B2B Payment Process
The aftermath of COVID has not spared anyone ranging from SME businesses to large established enterprises, thereby accelerating the need to move to digital payments with an unprecedented sense of urgency across the B2B payment landscape.
Business as usual had a new meaning and organizations shifted to a remote style of working. Legacy payments that were on-premise got stranded and paper checks were getting piled up across the globe in office mailboxes. The timing was not in favour of the slowdown as companies needed working capital desperately to keep their businesses going.
This is when both sides of the business entities – buyers and suppliers realized that without the apt digital B2B Payments Methods, payments could not be accessed or reconciled.
Advantages of adopting digital B2B payment methods
Over the years, businesses are slowly but steadily adopting digitized B2B payments methods. By 2022, cross-border payments are expected to touch $35 trillion and there is a pressing need for speedy and seamless movement of money.
Reduced costs and time saved
A digitized and automated solution can bring down the time and cost spent on processing invoices and eliminate manual and labor-intensive processes.
- Increased Security: The transactions conducted via digital B2B payments methods can identify and fix potential weak points in the payment files, treasury systems, and supplier management.
- Operational agility due to enhanced visibility: Digital and modern payment solutions address the need for fund transfer visibility and financial operational quickness.
- Improved efficiency and accuracy: Modern B2B payments methods require staff to spend less time on payment-related tasks, ensuring efficiency and reducing human errors.
- Digital payments focus on both speed and efficiency: Apart from the unending conflict between sellers and buyers in the B2B space about the suitable payment speed, the other benefits of digital payments have gone largely unnoticed. There are various benefits apart from the speed that digital payments offer that can revolutionize the B2B space. Some of the benefits of going digital include:
- Increased payment transparency: B2B merchants can take advantage of real-time visibility and transparency brought about by digital payments. Escrow payment providers such as Tazapay bring to the forefront how transparency in business operations and payment methods go a long way in bringing down trade costs and help in enterprise growth.
- All time availability: Traditional payment methods work during a particular time whereas digital payments are independent of the working hours of a bank or any specific institution. The buyer and sellers can resolve their payment at any point of the day irrespective of the operating hours.
- Richer payment information: Digital B2B payment methods offer real-time availability of rich payment information. The majority of the digital payments follow the ISO 20022 standard, which regulates the type of information associated with the payment. Since payment information is present in the transaction data, companies save a lot of time that would have gone into reconciling data on the phone or an email.
- Increased modes of payment available: Through digital payments, merchants can enhance their global reach as they have the flexibility to choose whatever payment method they deem fit.
Through mobile wallets and credit cards, financial companies are offering digital B2B payment methods. The addition of API-enabled interfaces generate highly secure and faster B2B transactions.
Digital payments can disrupt the financing process by reforming how consumers and businesses interact with banks and receive financing without dealing with any financial institution.
Escrow payment solutions such as Tazapay offer protection to both the parties involved by guaranteeing that funds will be sent and received when the terms of the contract are met by both parties. They hold the funds of the buyer, assuring the intent to pay, and only dispatch the funds to the seller once they have met the obligations. Furthermore, their payment facilitators are regulated by authorized departments guaranteeing the safety of funds.
- Affordable payment costs: Traditional payment methods are characterised by high costs such as labor costs whereas digital payment providers enable more efficient spending. Since the whole process is automated, fewer costs are involved in the long run.
No Turning Back: The Future of B2B Payments
The pandemic was the tipping point that stimulated businesses from considering digital B2B payments, to actually adopting them. Companies that integrated digital payments when it became the need of the hour, were not doing it temporarily but it was becoming the way of the business world going forward. Difficulties already persisted and the pandemic amplified them; digitization was viewed as the silver lining of this period.
As the world becomes increasingly dependent on automation and technology, B2B businesses need to focus on the digital transition to introduce flexibility in the way people transact with them, offer convenience and ease, bring down costs and ensure less friction in the entire process. Digital payments are here to stay and the chances of returning to inefficient and manual, paper-based B2B payments are negligible.