Now more than ever, with the advent of new payment technologies evolving every day, B2B payment trends in 2017 are swiftly shifting towards secure electronic payment solutions. While many payment tools offer increased convenience, they are not always secure or timely. Accounts payable fraud is also a valid and real concern in the current market. Hackers are becoming more and more savvy about technology loopholes that accompany credit cards, and paper checks present some of the most frightening security risks to businesses. Additional costs and time associated with global B2B payments are also shaping the demand surrounding secure automated accounts payable solutions. Below we review some of the B2B payment trends that are continuing to evolve in 2017.
A bot, also called Internet Robot, is a software application that runs automated tasks, or scripts, over the Internet. They are often used to perform highly repetitive operations and can easily automate payments and other financial tasks. Bots certainly have the potential to radically improve the way businesses manage money and payments, but the technology is not perfect on its own. Malicious bots, created by hackers, present risks to businesses including swiping credit card numbers and/or personal data. We saw this unfold in 2013 with the massive data breach at Target that affected approximately 70 million customers when their personal information was stolen during the holiday season, and more recently Google and Facebook were conned out of $100 million in a phishing scam where bogus invoices were submitted and paid, proving that even the largest technology firms are not always immune to scams.
These two instances underscore the importance of incorporating automated fraud detection into electronic AP and payment as well as the use of highly secure virtual credit cards. The capabilities of bot software are exciting as it allows businesses to stay on top of payments and pinpoint suspicious activity in the form of duplicate invoices, or inappropriate employee spending, but only when coupled with the right security features.
BITCOIN and BLOCKCHAINS
Bitcoin is a type of digital currency that is exchanged via a blockchain. The blockchain is essentially a digital ledger of every transaction that allows users to verify their Bitcoin payments. Using Bitcoin and blockchains does not require the input of confidential information creating a supposedly incorruptible system, and it is all done independently of a central bank. It’s basically the equivalent of using cash on the Internet.
Despite what would seem like the ideal payment solution, US regulatory entities are not completely on board. Questions surrounding the lack of regulation are creating potential roadblocks for this form of currency exchange. An example of this pushback is evidenced through a recent request made by the IRS to Coinbase, the largest Bitcoin exchange, asking for customer records between 2013 and 2015. This inquiry into possible tax evasion of Coinbase customers has many people concerned about the future of Bitcoin in terms of financial taxation and privacy.
Unlike Bitcoin, mobile payment services are operated under financial regulation while still offering next level convenience and security to businesses that want to move away from cash, paper checks, and traditional credit cards. Virtual credit card mobile payments offer a highly secure and convenient method for integrating single-use credit card numbers, maximizing the benefits of integrating electronic accounts payable systems.
INCREASED GLOBAL TRANSACTIONS
Whether it’s a blockchain or mobile payment, B2B partners are finding electronic accounts payable solutions particularly useful if the solution also allows global B2B payments where foreign exchange fees, taxes and extended processing times are typically cumbersome and restrictive. With the use of automated accounts payable options that integrate the appropriate security features, cross border challenges can be instantly avoided. This makes it increasingly easy for businesses to expand into new markets where fraud rates may be high and credit card usage is not offered.
Another payment trend that we’re seeing more of is dynamic discounting. Dynamic discounting offers several discount options to buyers under the premise that the sooner you pay, the higher your savings will be. The discount system incentivizes early payments and supports a consistent cash flow for businesses, ultimately reducing the pull on accounts payable resources. This approach to invoicing gives suppliers an extra leg up on traditional payment terms by motivating buyers to pay invoices early and subsequently saving the accounts payable team time and resources chasing after money owed.
Regardless of how you approach it, electronic payment solutions are rapidly gaining popularity for B2B payments. While there may still be resistance to going paperless, the technology is here and it’s already allowing businesses to pay vendors faster, reconcile accounts more quickly, and save substantially on operating costs associated with check processing, global transaction fees, and fraud. With the right electronic AP systems in place, businesses can easily and securely manage their payables with an impressive ROI.