EIPP and the mobile revolution in B2B payments

Imagine it is the seventh day of the month and you are in a train when the clock strikes 7pm. You suddenly realise that it is the last day to pay your electricity bill. What would you do?

The next phase in the evolution of B2B payments will be dominated by mobile tech

Well, in today’s mobile age, you open your mobile banking or payments app, select the bill, opt for your preferred mode of payment, authorise the payment and boom… The payment is made!

Now imagine the same scenario in a B2B setup. You work in the Accounts Receivable (AR) or Accounts Payable (AP) department of a large distribution company, and it is the last day to pay an invoice from your seller. You have had a busy day and could not process this payment earlier. Now, can you actually view invoices and initiate the payment on the go from your mobile? Though the legacy finance departments might argue, the answer is yes.

Thanks to technologies such as Electronic Invoice Presentment and Payment (EIPP) platforms, today, B2B payments are witnessing massive digital transformation. EIPP enables sellers to extract invoices from their ERP and present them to buyers anywhere, any time, on any device.

At EIPP’s core is the ability to process complex and often cumbersome B2B payments via mobile phones. Indeed, the next phase in the evolution of B2B payments is mobile technologies.

The imperative for digital transformation in B2B payments

Optimising financial operations with the aim of gaining visibility over cashflows and increasing coordination with channel partners has become a priority for large enterprises. This is especially true in today’s disrupted business environment, where record-breaking inflation is biting into the business operations and profitability of businesses.

Additionally, while B2B payment methods are highly fragmented and antiquated, the global payments architecture is increasingly becoming integrated and digitised. For example, financial institutions are mandated to migrate to ISO 20022, which creates a standardised language and model for payment data. In lieu of this, the B2B payments ecosystem must not stay behind the curve.

The state of digital transformation in B2B payments

Software-as-a-service (SaaS) platforms have played a key role in the transformation of B2B payments via automation of AR-AP functions. This helps in gaining complete visibility over cashflows and clearing payment bottlenecks among channel partners to streamline financial operations.

The next phase in the evolution of B2B payments however will be dominated by mobile technologies on the back of two key factors. First is the fact that due to the ubiquity and convenience of B2C payments, customers are now accustomed to processing transactions at the click of a button. With the aim of incorporating such convenience in B2B payments, mobile technology is emerging as a critical defining factor for customer service and satisfaction. Customer experience is increasingly becoming a key differentiator in the domain of B2B payments as well. Second is the burgeoning market for B2B mobile payments itself. At a CAGR of 30%, mobile payments in the USA are expected to surpass $590 billion by 2032.

However, there are also several systemic challenges that need to be overcome to make the adoption of B2B mobile payments a success. For instance, B2B payments are usually high value transactions that require a system to verify and safely transfer payments to and from bank accounts. In addition, resolving errors in these transactions can be tedious owing to disputes that may take weeks to reconcile and often result in a loss of revenue to the businesses.

Addressing the core challenges in B2B payments with EIPP

Similar to the ubiquitous reach of B2C and P2P payments, mobile phones have become an important platform for B2B payments in developed economies as well as emerging markets. Underpinning this are EIPP and vendor portal platforms that are creating a ‘consumer-like’ payment experience for B2B payers on the mobile.

Mobile channels bolster the ability of sellers to present invoices faster as they are delivered directly to a buyer. On the other side, this enables the buyer to clear invoices and make payments on the go, with maker-checker processes as required. Additionally, buyers receive real-time actionable notifications on early payment cash discounts and available credit notes.

This ability to run simultaneous payment procedures seamlessly across mobile devices significantly reduces the burden on the resources of the treasury, finance and sales teams.

Final thoughts

The Covid-19 pandemic has transformed all aspects of modern life, including how businesses operate and perform routine functions. Further, as business transactions face increasing complexity in today’s disrupted world, enterprises need to adopt smart and flexible payment solutions. Mobile technology in B2B payments, led by EIPP, are going to be critical tools for enterprises that are mapping the road to financial transformation.