The advancement of technology is continuing to drive more secure and efficient B2B payments as we look at 2018 Payment Trends. Companies are already making big shifts from traditional paper checks and plastic credit card payment methods to more modern electronic options like virtual credit cards. Below are a few more of the specific trends we’re continuing to see in 2018 as we look towards the future of accounts payable (AP) automation and electronic B2B payments.
Collaboration Between Banks and FinTechs
One of the biggest trends of 2018 has been the increased collaboration between banks and FinTechs. Not long ago, FinTechs were seen as a disruptive threat to traditional financial institutions; however, the realization that their differences could actually be grounds for a strong partnership is becoming more prevalent. Banks are very process-oriented. They have restrictive regulations, making it difficult for them to introduce technology-driven products and services to the market in a timely manner. FinTechs, on the other hand, are technology-oriented and very nimble. Banks are leveraging the attributes of FinTechs to enhance their own customer relationships while minimizing costs and optimizing resources. Although there are still some points of difference, both parties recognize the value of working together in order to add value to their services.
One way in which banks are leveraging FinTech capabilities is with open banking. Open banking refers to the use of APIs (application program interfaces) that enable third party developers – like FinTechs – to build software applications and automated services tailored to financial institutions. Open banking is important because it allows for more integrated platforms and better services that drive efficiency in payments and ultimately improve customer relationships.
Blockchain is the distributed ledger technology behind digital currencies, like Bitcoin, that records and validates each and every transaction made. Though traditionally associated with digital currencies, this technology can be used to trade in anything of value. Blockchain technology has great potential to create an entirely new system for payments where data is securely shared, matched, and replicated. Money will be able to move quickly from one point to another without a mediator in between, simplifying the entire process. Blockchain is particularly attractive for dealings with international payments because it brings down the very high costs banks typically charge.
Paper Checks Still on the Downslide
The majority of people would likely say they can’t actually remember the last time they used a personal check. Considering how far we’ve progressed from paper checks on a personal level, it’s no surprise that we’re seeing more of the same when it comes to our approach to business payments and 2018 payment trends. Thankfully, we’re seeing less of the misperceptions surrounding the convenience and security of checks – they actually cost more time and money than any other form of payment – and instead more businesses eager to make the necessary steps toward AP automation and electronic payments. Eliminating fraud, making payments faster, gaining better control of employee expenses, and saving significant manual hours across company departments are all driving the continued decline of paper check usage in 2018.
Mobile payments are another technology trend that is finally starting to gain solid footing in the B2B world. Companies have started to introduce more mobile-friendly payment portals for their customers, giving them even more flexibility and mobility around automated controls in the process. Settling invoices with record speed and in real-time will be the next advancement as we see accounting software integrating seamlessly with mobile technologies.
B2B payments are in the midst of an exciting digital transformation. The ultimate goal as we assess these 2018 payment trends is to get companies to adopt safer, faster, and more efficient methods of payment that are easy to implement. As technologies continue to evolve, new players enter the space, and the value of electronic payment processes are realized, we expect to see an even bigger push towards total AP automation across all payment types.