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Fintechs gain favour for B2B payments processing

Across the business-to-business (B2B) landscape, partnering with fintechs for B2B payments processing is becoming the strategy of choice for a majority of banks and a growing number of corporates, reports Bottomline Technologies.Working

The US business payment and collections automation provider has issued its 2019 B2B Payments and  Capital Management Strategies Survey, in partnership with Strategic Treasurer. Bottomline’s third annual survey polled more than 300 financial professionals from companies of all sizes and industries in North America and Europe.

The 2019 survey finds that 76% of banks are either looking to leverage fintech solutions as much as possible for payment-related services and solutions, or are doing so to deliver select niche capabilities to specific customer segments. Related to this, 28% of corporates indicated that they use a non-bank provider for payments currently, and 32% of corporates plan to expand their use of fintech payment solutions within the next three years.

In a similar survey conducted two years ago, less than one in five corporates were using non-bank payment solutions. These findings underscore the growing acknowledgement of fintechs’ ability to deliver best-of breed payment capabilities, and the increased opportunity for banks to partner with these providers to meet client demand across all aspects of B2B payments.

Nearly half of corporates are using or interested in using new payment
services with the top focus being real-time payments (55%), followed by same-day automated clearing house (ACH) (44%) and blockchain-based networks (35%). Both banks and corporates agree that application programming interfaces (APIs) are the technology that will have the biggest impact on the B2B payments landscape over the next two to three years.

A shift in mentality

According to the latest survey, there is variation in which aspect of B2B payments businesses focus on depending on their size. Small companies are twice as likely to focus on accounts receivable initiatives compared to their larger peers, which are more likely to focus on payables. For organisations of all sizes, top areas of remaining inefficiency across treasury, accounts payable (AP) and accounts receivable (AR) include cash forecasting, invoice processing, and payment receipt and reconciliation.

“Whether you’re a bank or a corporate, fintech payment solutions need to be given a serious examination,” said Craig Jeffrey, managing partner, Strategic Treasurer. “Banks and corporates stand to benefit from aligning with fintech solution providers across all aspects of payments to arm themselves with the capabilities required to stay competitive.”

“The shift in mentality of both banks and corporates means that there is more opportunity than ever for technology adoption in the business payments space,” said Bill Wardwell, vice president of strategy and business development, Bottomline Technologies.

“The survey results reinforce the need for payments solution providers to deliver truly innovative digital solutions, which enhance the overall payment experience without sacrificing security.”

The survey also finds that payments security continues to be top of mind, with treasury indicating that fraud is their top payments-related challenge and AP representing the source of the majority of fraud losses.

Data shows AP suffers a loss from payments fraud three times more frequently than any other department. This may stem in part from the difficulty AP faces when managing and updating vendor bank account details, with 55% of respondents indicating this is their top AP pain point.


This item appears in the following sections:
Bank Relationship Management & KYC
electronic Bank Account Management
Payments - Bill Collection
Payments - Collecting at POS
Payments - Making
International Payments
Paying Suppliers
Region
Europe
North America

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