What does a fully digitized B2B payments landscape look like? What nuances and efficiencies does it bring into the fold? What systems partner together to deliver smarter channels for conducting business?
It’s not easy to predict the future, but at Billtrust, we’ve started to understand what it may look like – especially when it comes to paperless, automated payments and digitized systems seamlessly working together.
Everyday, the technology solutions we depend upon advance and grow. When it comes to B2B, and some of its essential partners and components like banking and FinTech, this is even more true. In the final installment of On the Lookout, we’re going to look at how the union and merging of these two payments pillars will bring us closer than ever to a fully digitized B2B market.
FinTechs and Banks…Unite?
Over the past year, the big question in the payments world seemed to be, “who would be the first to introduce a solution that materially migrates volume away from paper checks”: FinTechs or established financial institutions?”
B2B businesses seem to think that banks will be the first to solve their B2B payment woes. A recent report found that 69% of companies expect their banks to deliver B2B payment solutions, not FinTechs. The same report shows 82% of respondents consider banks as leaders in the payments innovation space, whereas only 23% of respondents consider small FinTechs leaders.
However, trends are pointing to increased collaboration between FinTechs and big banks. While some FinTechs are determined to make it on their own, many are actually reaching across the aisle and joining forces with big banks. In fact, 2018 saw the start of many beautiful alliances between big players and smaller companies, such as the partnership between Billtrust and Visa to create the Billtrust Business Payments Network.
The number of these collaborations is only going to increase in 2019. A reported 75% of FinTech executives said their goal was to partner with established players rather than challenge them.
When you look at it from the outside, these partnerships make perfect sense for both parties. FinTech providers gain access to essential capital, get name recognition in existing markets, and reach a customer base that may have otherwise been inaccessible. On the flip side, bigger bank players want to be a part of B2B payments innovation, but they also have to do what they’ve always done: be banks, lenders, respond to customer inquiries and the like. They recognize that because they have to maintain their regular duties they can’t always give their customers the advancements in technology that they’re looking for. By partnering with FinTech providers though, they get access into important innovations and insights from a team of people who have dedicated their time to researching and finding payments solutions.
In the wake of these partnerships though, B2B providers will gain access to new platforms that will completely transform the world of payments.
Over the past few years, innovation labs have also become a major trend with the bigger payments players, and will continue to be throughout 2019. Labs, like the Wells Fargo Startup Accelerator, have been developed to connect startups with big banks and financial institutions. The labs provide the resources necessary to tackle payments problems, and in return they share their innovations and insight with the institution.
Businesses are most successful when all of their various parts are working together and as efficiently as possible. Payments are an essential part of that equation, and 2019 is going to be a critical year for ensuring that they are a cohesive part of the organization and not a source of friction. We look forward to see how continued innovation transforms the B2B payments space in 2019.
Wrapping up
We hope you enjoyed this series and and learned some new things along the way. The new year promises to be one full of innovation and technological expansion when it comes to payments and B2B, and we can’t wait to see where it takes us.