As chief financial officers (CFOs) make a continued shift toward investing in digital payments, they may differ on their reasons and priorities, but they agree on the benefits they expect to realize from such investments.

To assess the digital payments technology investment payoffs and priorities, PYMNTS and Corcentric collaborated on a survey titled Digital Payments: A Changing Economy Sparks New Priorities for Systems Spending that polled 500 CFOs representing the healthcare, finance and insurance, retail and manufacturing sectors.

According to the survey report, “Many businesses are counting on their digital technology investments to help them navigate the next wave of changes in the digital economy, recognizing the importance of a robust payments infrastructure to carry out fundamental business processes.”

Some of the key findings of the survey include the following:

Investments in digital payments technology have improved business operations

“At least three in five CFOs report that their investments in digital payment processes have improved business operations”, as per the digital payments report.

Retail, manufacturing, finance and insurance CFOs were more likely to believe that their digital payments technology investment have boosted their business operations than CFOs from healthcare organizations.

“Our data shows that 80% of manufacturing CFOs, 71% of retail CFOs and 73% of finance and insurance CFOs said their working capital and credit systems improved from their investments in digital payments technology. Just 59% of healthcare company CFOs said the investments in digital payments improved their operations”, the report noted.

Main beneficiaries of digital payments technology investments

CFOs across retail, manufacturing, and finance and insurance sectors believe fraud prevention and risk management, working capital and credit management, and accounts receivable (AR) and accounts payable (AP) systems are the top three beneficiaries of their investments in digital systems and processes.

“Seventy-five percent of retail CFOs, 75% of manufacturing CFOs and 73% of CFOs for finance and insurance companies said their AR systems improved because of those investments. Similarly, 65% of healthcare company CFOs said investments in digital systems have improved their AR systems”, the survey mentions.

CFOs also noted gains to their procurement systems, though there were greater variations among the four industry sectors. Manufacturing and retail CFOs saw the highest benefits to procurement processes, with healthcare reporting the least (55%) procurement systems improvements due to digital payments investments.

In fact, according to the PYMNTS survey report, “Procurement systems are already a priority for many companies: 15% of healthcare companies, 19% of finance and insurance businesses, 31% of retailers and 42% of manufacturers are currently spending to improve them.”

Given that finance chiefs have seen benefits to procurement activities, and there is greater attention being paid to procurement processes, “Digital procurement systems are expected to receive a surge in investments across all sectors, with 45% of healthcare companies, 38% of finance and insurance businesses, 53% of retailers and 44% of manufacturers planning to invest in them,” the survey report explains.

Economic uncertainty propelling investments in digital payments systems

CFOs are making investments in digital payments technology to emerge stronger from a looming recession.

Finance leaders grappling with economic uncertainty are embracing urgency to spur these investments in improving their fraud prevention and risk management, working capital, procurement, AR and AP systems to strengthen their digital payments infrastructure.

Going forward, retailers and manufacturing are poised to invest more on working capital and credit innovation, while finance and insurance and healthcare are focusing more of their investments on both fraud prevention/risk management and accounts payable (AP) systems.

With regard to working capital and credit systems, “60% of retailers and 71% of manufacturers say economic uncertainty is very or extremely influential in their decisions to invest in working capital and credit systems. In contrast, just 48% of healthcare companies and 51% of finance and insurance businesses say economic uncertainty is very or extremely influential in their decisions to invest in working capital and credit systems”, the report further added.

Investments in AP systems for healthcare companies (67%) and finance and insurance firms (71%) are more influenced by current economic slowdown and uncertainty than corresponding digital payments systems investments by retailers (61%) and manufacturers (60%).

Looking at the procurement priorities, the survey found that retailers, manufacturers and finance and insurance companies are more invested than healthcare, while for healthcare, the most attention is being paid to AR systems (100%).

Conclusion

A number of factors are converging to reshape the digital payments landscape – the risk of global recession, continued interest rate hikes, surges in cybersecurity attacks, exchange rate volatility, geopolitical conflict, growing regulatory complexity, trade wars and, more importantly, increased adoption of digital payment technologies.

Investments in digital payment innovation and technology are key to improving corporate cash management and business operations in times of economic headwinds, as is harnessing real-time cash flow visibility, global commerce and the evolving digital economy.

As corporations “Strengthen their AR, AP, working capital, procurement, and fraud prevention and risk management systems, businesses expect that these investments will help them get an edge over competitors — even in an uncertain economy”, states the PYMNTS report. These investments should also help organizations optimise remote workforces and modernize business functions.