Driving the Future of Payments
Consumers expect a fast, seamless experience when paying for goods and services online. Here are six ways to help bring that same efficiency to business transactions.
Technology has dramatically changed how consumers pay for goods and services. People are now accustomed to using their smartphones to buy items online, manage their bank accounts or pay a friend. However, many organizations are still catching up to the digital shift. Forty-two percent of business customer payments were made via check in 2019.1 Business leaders and corporate treasurers face complex decisions when designing a payments strategy that prepares them for the evolving payments landscape. Below are six considerations when building a digital payments process.
1. Virtual Account Management
Virtual Account Management (VAM) platforms can give clients the flexibility to manage detailed reporting under one umbrella. VAM can also provide data to help create efficiencies in payables and receivables, automate vendor receipts and reconcile to enterprise resource planning (ERP) and general ledger accounts.
2. Fraud Protection
While most customers may not know how digital transactions occur, they expect them to be smooth and secure. Security is a big concern for businesses as well—safety remains a major hold-up for companies considering a move to digital payments.
Business and employee authentication is a key way to help ensure that the right people have access to the right accounts. Multiple-step authentication, face recognition and biometrics have helped improve security in recent years. Artificial intelligence can also help prevent fraud by recognizing and flagging abnormal transactions.
3. APIs and Blockchain
Application programming interfaces (APIs) can enable faster and more efficient business payments. APIs, which help applications communicate, are an integral part of real-time payments. With an API, a payment system can complete and confirm a transaction in less than 15 seconds.
Blockchain is a shared, digitized, immutable ledger technology that can help make cross-border wire transfers or sanction screenings more efficient. It can also make information sharing easier for international trade and transactions, which are expensive and take days to clear.
4. Real-Time Payments
Real-time payments can give businesses flexible payment options, creating a better experience for clients and employees. Traditional commerce is limited by the time of day, system operating hours, location and more. Real-time payments allow businesses to move money between companies in a matter of seconds.
5. Making Payments Frictionless
Corporate treasurers are looking for the same seamlessness they experience when sending money to friends, but most companies have greater restrictions around how they pay. Through artificial intelligence and other data, businesses can create rules for payments providers to deliver a payments experience based on those instructions.
6. Lessons for the Corporate Treasurer
With advances in digital payments, corporate treasurers have needed to become strategic leaders. Organizations rely on their expertise to find and develop a payment system that can send and receive money quickly and securely. That said, no treasurer should feel like they need to go it alone—they can turn to industry resources and banking relationships to help guide their business into the future of payments.