Making business payments seamless

As the dig­i­tal rev­o­lu­tion con­tin­ues to gath­er pace, the pay­ments mar­ket has firm­ly embraced the changes it brings. From chip and pin to con­tact­less and Apple Pay, a stream of new tech­nolo­gies has trans­formed the way in which mon­ey is moved.

The same can­not be said for busi­ness­es. Despite a boom in B2B cross-bor­der pay­ments, with the US mar­ket esti­mat­ed to be worth $4.26 tril­lion alone, it remains a com­plex and cum­ber­some under­tak­ing.

Com­pared with the con­sumer mar­ket, where cus­tomers have come to expect a vir­tu­al­ly seam­less pay­ment expe­ri­ence, the process of trans­fer­ring busi­ness pay­ments across dif­fer­ent coun­tries and cur­ren­cies is plagued by high costs, lengthy time­lines and anti­quat­ed sys­tems.

On aver­age, com­pa­nies write off 1.5 per cent of their receiv­ables as bad debt. For a com­pa­ny worth $50 mil­lion, this equates to a stag­ger­ing $750,000 expense every year. While large cor­po­rates pos­sess the sophis­ti­cat­ed tools and resources to man­age their inter­na­tion­al busi­ness at com­pet­i­tive prices, small and mid-sized busi­ness­es are left at the mer­cy of the rates imposed by their banks, plac­ing increas­ing pres­sure on mar­gins.

How­ev­er, the tide is turn­ing. Recog­nis­ing the need to help the B2B mar­ket keep pace with con­sumer devel­op­ments, a new wave of inno­va­tion among pay­ment providers is seek­ing to rein­vig­o­rate the way busi­ness­es han­dle their cross-bor­der pay­ments.

In less than 10 years, B2B cus­tomers won’t set­tle their invoic­es in a dif­fer­ent cur­ren­cy

Todd Lath­am, chief mar­ket­ing offi­cer and head of prod­uct at Cur­ren­cy­cloud, explains: “Tra­di­tion­al­ly, inno­va­tion has focused upon meet­ing the grow­ing demands of con­sumers and ignored the more com­plex B2B mar­ket. How­ev­er, with almost half of all UK busi­ness­es receiv­ing late pay­ments from over­seas cus­tomers, there is a huge need to over­haul the out­dat­ed sys­tem cur­rent­ly in place.

“Advances in tech­nol­o­gy will allow busi­ness­es to expand and inter­act with over­seas cus­tomers and sup­pli­ers, with­out the huge infra­struc­ture, time-lag and headache involved in deal­ing with banks. Main­tain­ing cash-flow lev­els is crit­i­cal to busi­ness prof­itabil­i­ty, so in pro­vid­ing a fric­tion­less process, the pay­ments mar­ket can remove hur­dles to growth for small and medi­um-sized busi­ness­es.”

Cur­ren­cy­cloud has launched its own Glob­al Col­lec­tions func­tion­al­i­ty, which enables busi­ness­es to set up local, vir­tu­al bank accounts for cus­tomers, so their sup­pli­ers can pay them direct­ly in their home cur­ren­cy. In doing so, busi­ness­es will be able sig­nif­i­cant­ly to reduce the time and expense tra­di­tion­al­ly asso­ci­at­ed with glob­al accounts receiv­ables, mak­ing it eas­i­er for com­pa­nies to col­lect pay­ments where their cus­tomers are.

Mr Lath­am says: “We’ve sought to pro­vide our clients with flex­i­ble solu­tions that allow them to make inter­na­tion­al pay­ments with­out any of the bur­den­some issues they cur­rent­ly encounter. Increas­ing­ly, we will see this become the norm rather than the excep­tion, as glob­al trade grows and pay­ment providers recog­nise the need to make this space more acces­si­ble and appeal­ing.”

We are only at the begin­ning of what will be an inter­est­ing and rev­o­lu­tion­ary next decade for the B2B cross-bor­der pay­ments mar­ket. Mr Lath­am expects greater col­lab­o­ra­tion between the bank­ing and fin­tech sec­tors, as the for­mer har­ness the ben­e­fits of new dig­i­tal solu­tions with­out hav­ing to invest time and resources to build them inter­nal­ly.

“In less than ten years, B2B cus­tomers won’t set­tle their invoic­es in a dif­fer­ent cur­ren­cy. Many com­pa­nies are jump­ing on the blockchain band­wag­on, but it won’t improve the way mon­ey cross­es the world. What will ulti­mate­ly rev­o­lu­tionise the pay­ments land­scape is pro­vid­ing busi­ness­es with the same lev­el of inno­va­tion and expe­ri­ence the con­sumer space has now come to expect as stan­dard,” Mr Lath­am con­cludes.

For more infor­ma­tion please vis­it  currencycloud.com