How Digitizing B2B Payments is Helping Businesses Grow Faster
In recent years, the trend of payment digitization has gained momentum, with merchants rapidly replacing legacy payment systems with modern alternatives. This shift has impacted almost every aspect of the business, including B2B payments, accounts receivable, accounts payable, and the adoption of additional payment methods for consumers. According to a PYMNTS survey, businesses are making as few as 25% of B2B payments by check. Many are investing in new accounts receivable and payable systems to bolster their payment modernization efforts. Additionally, 77% of retailers are currently investing or planning to invest in new accounts receivable systems.
At Metaprise Banking, we understand the benefits of payment digitization for merchants and believe it is a crucial step toward digital transformation. In this article, we will explore the accelerating adoption of modern payment methods, their benefits, and how they can help businesses stay competitive in a rapidly evolving landscape.
The Impact of Payment Modernization on B2B Payments
The movement towards payment digitization is driven by many factors, including frustration with current payment choices. A recent LexisNexis report found that 70% of corporations and financial institutions are unsatisfied with their rate of payment failures, and 64% of respondents reported that these failed payments negatively impacted staff workloads. Failed payments also increased costs, with an average per-payment fee of $12.10 for unsuccessful payments.
According to a PYMNTS survey, small business payers encounter an average of five pain points when making B2B payments, with manual reviews and time-consuming procedures among the top concerns. This issue can be alleviated with modern payment systems, which is why 92% of financial institutions are innovating or planning to innovate digital solutions to reduce B2B payment frictions.
In 2022, the automated clearing house (ACH) network in the United States processed a staggering 30 billion payments totaling nearly $77 trillion. This amount marked a 3% increase in volume compared to 2021, driven by increased use of Nacha's faster payments option, same-day ACH. Business payments notably improved, with same-day ACH B2B transactions growing by 44% from the previous year.
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The Benefits of Payment Digitization for Merchants
Payment digitization can bring many benefits to merchants, including increased efficiency, reduced costs, and enhanced customer experiences. According to a PYMNTS report, 65% of non-grocery retailers are incorporating additional payment methods, while 55% and 56% of grocery and convenience stores, respectively, are also following suit. Most companies have started accepting real-time payments or plan to do so, and many are looking at other business innovations, including loyalty programs and refund processes.
As the pandemic forced physical locations to close or impose restrictions on access, businesses had to pivot quickly to online channels and contactless payments to survive. The resulting digital transformation will continue because companies must embrace digital solutions to stay competitive.
A Metaprise Banking Perspective
At Metaprise Banking, we believe that payment digitization is crucial for businesses to stay competitive and drive growth. Our perspective is that payment modernization goes beyond just replacing legacy payment systems; it involves a holistic approach to business process optimization that can lead to improved efficiency and reduced costs.
We understand the pain points of B2B payments and the need for modern payment systems to address them. Our team has extensive experience in implementing digital payment solutions that can streamline the payment process and reduce the number of failed payments, saving businesses time and money.
Furthermore, we believe that payment digitization should be integrated into a broader digital transformation strategy that includes online channels and contactless payments. By embracing digital solutions, businesses can improve customer experiences and increase loyalty.
We are committed to helping businesses navigate the complexities of payment digitization and digital transformation. We offer tailored solutions that can address specific pain points and drive business growth. With our expertise, businesses can stay ahead of the curve and stay competitive in a rapidly evolving landscape.