I always look forward to meeting with payments colleagues at the Nacha Smarter Faster Payments conference. It was my first time in Las Vegas in 10 years, and the event didn’t disappoint. I focused on B2B payment developments this year and attended several sessions. I’ve summarized three here and also attended sessions on solving corporate payment challenges with APIs and the ISO 20022 migration. Celent’s own Gareth Lodge and Ulf Persson from Seeburger discussed “ISO 20222: Friend or Foe”, based on our recent report “Ready Or Not, Here It Comes: There's No Hiding from ISO 20022."
Citi Commercial Cards: Future is in the Cards, The Growing Trend Towards Virtual Cards: The pandemic led accounts payables teams to (finally) accelerate the adoption of electronic payments in North America. A beneficiary of this shift was virtual cards, spurred by an urgency to meet supplier deadlines, keep vendors and contractors satisfied, and maintain in-office processes in a work-from-home scenario. With an expected 33% growth trajectory, innovative banks are making it easier to originate virtual card transactions into integrated payables files generated by ERP systems and to leverage bank APIs to submit XML-formatted files. However, best practices for a successful virtual card program haven’t changed: incentivize suppliers, perform outreach to all suppliers, and ensure internal/external communication of the program.
The Federal Reserve: Creating a Digital Highway, The Road to Transforming B2B Payments: According to the Fed, in the U.S., over 75% of delivery and processing of invoices and remittance information is manual, costly, and creates electronic payment adoption friction. And an estimated 40% of B2B payments are still made by paper check. The Business Payments Coalition and FedPayments Improvement Community are working toward a ubiquitous invoicing and remittance exchange framework. Payments will include a linking ID for matching the payment and remittance information. In addition, the framework will feature multiple access points to serve suppliers and buyers. Examples of access points include B2B networks, AP and AR providers, banks/financial institutions, and billing and electronic invoicing providers.
Seamless B2B Payments: When Transformational Technologies Meet Traditional Processes: Kudos to Synovus for including practitioners from a wholesale broker, serving the insurance industry, and a solution provider in the healthcare payments space. The session featured results from the 2022 Strategic Treasurer AP/AR survey. For example, for AR in large organizations, only 19% of respondents were highly automated, 65% had a mix of manual and automated processes, and 26% were manual or largely manual. Likewise, remittance data is a mixed bag, with email and PDF dominating, but EDI, XML, delimited, and fixed-length files also play a part. Also, for large organizations, management initiatives and priorities are the most significant deterrent from being highly automated, followed closely by IT availability to support, and competition for resources.
What sessions did you find the most compelling or instructional? Happy to exchange notes on the conference.
P.S. – I really enjoyed the keynote from Molly Bloom (@ImMollyBloom). What a life she’s lived! I’m going to have to check out the movie inspired by her book, Molly’s Game.
B2B Payments Definition, According to ChatGPT:
B2B payments, also known as business-to-business payments, refer to financial transactions between two businesses or companies. These transactions can take many forms, including payments for goods or services rendered, invoices, and electronic transfers between accounts. Unlike B2C (business-to-consumer) payments, which involve transactions between businesses and individual consumers, B2B payments usually involve larger amounts of money and are often conducted on a more regular and formal basis. B2B payments are a critical aspect of modern business, allowing companies to conduct transactions quickly and efficiently while maintaining financial records and controlling expenses.