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The Business Payments Crystal Ball

The Business Payments Crystal Ball

This past weekend I popped into my neighborhood bagel shop—a small, local chain—to grab a bag of bagels to take home. I was greeted by the owner, who was brewing coffee, running the register and checking the oven, all the while scanning her inventory for an order she was placing later that day. As I pulled out my wallet, I realized my payment was the last thing on her mind.

Such is the nature of the small-and-midsize business (SMB) experience. I know I’m singing a familiar tune when I call out that owners wear multiple hats to keep their businesses up and running. Unfortunately, the refrain remains the same: Payments fall to the bottom of the priority list.

Today, SMBs comprise 99.9 percent of all firms in the U.S. , and organizations with fewer than 100 employees have the largest share of that employment. This paradigm drives much of today’s B2B check writing, manual processes, and clunky internal systems. With owners focused on the passions that led them to launch the business, they often choose the path of least resistance for their infrastructure.

B2B payments have been a tough nut to crack precisely because SMBs don’t know what they don’t know. It’s challenging for them to identify solutions to streamline and automate processes, integrate disparate systems, and transition from checks to electronic payment solutions. Writing checks isn’t so much of a choice as it is a default option.

But times they are a-changing…and quickly.

What’s driving this accelerated change? For one, the  shifts in consumer technology. We are at a place where personal experience dominates SMB thinking. If I can pay my friend for dinner in real-time with my mobile phone, why can’t I make business payments as effortlessly? Trends in micropayments, cryptocurrencies, and e-wallets stand in stark contrast to inefficient business processes and help pave inroads to new enterprise solutions.

In addition to consumer progress, the simple make-up of the workforce also propels this evolution. SMBs are responsible for nearly half of private-sector jobs, and as generations who have grown up in a digital, instantaneous age graduate to positions of influence in SMBs, they will look for—and institute—seamless solutions that align with their individual experience.

This market tipping point poses new prospects for financial institutions. Deloitte reports that B2B ecommerce solutions are increasing at a faster compound annual growth rate (CAGR) than that of the full B2B market, creating sustainable economic growth and development. In fact, Goldman Sachs’ report B2B: How the Next Payments Frontier Will Unleash Small Business estimates that the market offers a $1 trillion revenue opportunity. Banks can capitalize on this by acting as their SMB customers’ partners, extending the solutions that speak to the needs and interests of the organization.

Businesses also stand to gain by engaging more digital, frictionless solutions. The right products will yield them greater efficiencies and a better bottom line. The same Goldman Sachs5 report concludes, “… a new generation of payment and software solutions is emerging which promises to cut costs by up to 75 percent and unleash $1.5 trillion in small business productivity.”

These benefits come from engaging the right partner. With a lot of players in the space, financial institutions and SMBs will concentrate on the providers who offer solutions that automate procedures, holistically cleaning up back-end accounting processes and making them smarter and more efficient.

Artificial intelligence (AI) will be a game changer for these very reasons. Applying AI to accounting systems streamlines tedious workflows, removing unwieldy processes and simplifying complicated procedures by leveraging data in new ways. Bill.com is constantly in a state of evolution with customer experience (CX) and harnessing emerging technology like AI and user experience (UX) innovation to help businesses uncomplicate B2B payments.Time-savers like automatically saved workflows and smart vendor recognition further support business needs. These solutions create an optimized and more efficient back office, removing time from administrative tasks and allowing finance professionals to focus on more strategic business.

Clearly, we have arrived at the intersection of SMB needs and technology solutions. Looking into the future, banks that embrace new technologies and partners will benefit from this growing opportunity, and businesses will reap the rewards of new offerings. At the end of the day, offering simple, efficient payments solutions means businesses can focus on what’s important: the passion that drove them to open in the first place.

Gaze into the payments crystal ball with us

Join Bill.com at PAYMENTS 2019 this Spring, where CEO René Lacerte will speak on a panel that examines where to invest in the future of business payments and predicts how the B2B payments puzzle will be solved. Learn more about Bill.com sessions at PAYMENTS  and register to win some “funtech” by visiting our conference page (http://cashflow.bill.com/NACHA2019.html).  

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1 https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questi...

2 https://www.sba.gov/sites/default/files/advocacy/2018-Small-Business-Pro...

3 https://www.sba.gov/sites/default/files/advocacy/Frequently-Asked-Questi...

4 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-se...

5 “B2B: How the next payments frontier will unleash small business,” Goldman Sachs, September 16, 2018 https://www.goldmansachs.com/insights/pages/from_briefings_08-oct-2018.html

April 10, 2019
Kathryn Foley
Senior Director, Bank Channel Marketing, Bill.com
Kathryn Foley is a strategic marketing leader with deep expertise in small and medium businesses and financial services. She has worked with early stage start-ups and mature businesses to develop messaging, create channel marketing strategies, and develop and drive end-user adoption through partnerships. Kathryn has helped drive FI partner success with go-to-market and marketing best practices for Bill.com Connect and continues to build strong results through the sales and marketing enablement program.