Where Will the “Payments” of AP Payments Be in Five Years?

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The “payments” side of electronic accounts payable (AP) payments is evolving quickly. Where will it be in five years? We’ve become used to AP automation to some degree, optimizing workflow and invoicing scanning, but those approaches are far from high tech. Thanks to fintech, the combining of finance industry best practices and technology, banks and other related industries are in need of the latest advances. Customers want a “one file sent” solution for all their payments, not just a few.

Solutions that are becoming more mainstream include Vcards (virtual business cards, often that you can “share” with others by touching complementary smartphones), ACH with a nominal fee to the supplier complete with full data capture, straight ACH with standard data, forex (fx) and e-checks to some degrees. If you’re unfamiliar with these trending examples of fintech in the works, don’t worry—they’ll become household phrases and words soon enough.

How are banks and others in the finance industry making this happen? It’s all about outsourcing fintech. Outsourcing is nothing new, but today’s approach to it is. Some baby boomers might remember when payroll was first outsourced about 25 years ago. It seemed a bit crazy, not very safe, and surely a trend. But look where we are now! Today, outsourcing has come a long way and the outsourcing companies are very secure, capable, and eager to offer full AP payment solutions much better than most companies can manage on their own. Of course there are exceptions, but those are largely enterprises with the funding and size to essentially hire their own fintech department.

Why Not DIY?

Some people are wary of outsourcing, especially the old school crowd, and that’s understandable. For a few years, “outsourcing” got a bad rap because it meant hiring very cheap, unskilled labor (often overseas) to take care of busy work nobody wanted to do. Unfortunately, this busywork often meant talking directly to customers. Even though companies should have figured out quickly that this wasn’t beneficial to anyone—including themselves—it took a few years for this kind of outsourcing to fade. Still, the stigma around it remains.

That won’t last for long. Outsourcing actually just means using an outside source to take care of a business’ task, often much better than the business can. For fintech, this is especially relevant for small and mid-sized banks. With the future of the payment aspect of AP payments changing dramatically and including those state of the art Vcards, new trends with ACH payments, and e-checks making a serious dent in the market, it’s unfathomable that any bank besides a mega one could afford to hire an entirely new fintech department to take care of the nitty gritty.

That’s where outsourcing comes in, and it’s being done right.

Who Should Outsource?

Finance and banking need to be especially careful with everything they do because their customers are trusting them with their hard-earned cash and investments. What happens if a small bank tries to handle the e-checks, ACH changes and other upcoming staples of banking alone? What if they don’t have it in the budget to keep up with the latest, most secure technology? What if their branches are located in a rural area where the best workers aren’t located and won’t transfer?

Outsourcing to a very reputable company who solely handles these aspects of AP payments isn’t just a smart move, it’s really the only option. Still, some banking customers might not be quite sold. When they trust a bank with their money, they may assume that only the bank is taking care of them. However, that’s simply not how the majority of tech-based businesses operate these days.

It’s comforting and a plus to know your bank has identified the best fintech AP payment-based outsourcing company to take care of both of you. Ask your bank how they handle fintech, and you may be surprised by the answer! It really does take a financial village to keep your funds secure.

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