Impact of Fintech on International Business-to-Business Payments
================================================================================
In the bustling world of fintech, the question of how data can be harnessed to improve B2B payments strategies has taken centre stage. Daniel Webber, a LinkedIn user, recently posed this question, indicating a growing interest in leveraging data for optimized B2B payments.
This topic was the focus of a panel discussion at the inaugural in-person Fintech Meetup conference held in Las Vegas this week. The discussion highlighted how fintech is disrupting global B2B payments, and how data can inform B2B payments strategy.
The panel, which included Robin Gandhi (Chief Product Officer of Nium), Yanilsa Gonzalez-Ore (Senior Vice President, North America Head of Visa Direct), and Alexandra Johnson (Head of Innovation at Bank of America), argued that companies such as Bank of America, Nium, and Visa Direct need to work together, as there is already an inter-reliance between banks and fintechs.
The potential of blockchain for B2B payments was also discussed, with the ability to tokenise transactions identified as a potential benefit. The use of distributed ledger technology-based central bank digital currencies in cross-border payments was another point of interest.
The challenges of cross-border B2B payments were addressed, including the need for improvements in infrastructure, reduction of manual effort, and increased efficiencies. Speed versus transparency was a topic of debate, with variation in transparency across different corridors being raised as an issue.
The strategic use of data transforms B2B payments by driving automation, enabling fintech-enabled innovations, enhancing integration, reducing costs, and fostering trust and transparency. Here's a closer look at how this happens:
Automation and Efficiency through Data Analytics and AI
Data-driven automation in accounts receivable and payable leverages invoice processing, reconciliation, and approvals to streamline operations. Artificial Intelligence uses historical payment data to detect anomalies, reduce errors, and accelerate procurement cycles, thereby cutting manual work and improving cash flow visibility. This leads to faster payment processing, reduced disputes, and proactive risk management such as fraud detection.
Centralization and Integration
Robust B2B payment platforms aggregate diverse payment methods (ACH, cards, wires, digital wallets) and provide unified workflows and analytics dashboards. They integrate with ERP, accounting, and CRM systems, ensuring seamless data flow across departments. This eliminates silos, reduces reconciliation time, and offers enhanced control and compliance reporting.
Fintech Innovations and API Connectivity
Fintech disruptions, such as API-powered Buy Now, Pay Later (BNPL) solutions, use real-time data from credit bureaus, bank accounts, and trade references to instantly approve credit decisions and automate invoice financing. Data-driven underwriting reduces credit friction at checkout, improving buyer experience and supplier cash flow. APIs link payment gateways to enterprise software to automate complex B2B workflows like invoice generation, payment scheduling, and multi-level approvals.
Building Trust and Transparency through Predictive Analytics
Emerging payment orchestration platforms utilize predictive analytics and generative AI on payment data to provide real-time visibility into payment status, financing options, and external cost factors for both buyers and suppliers. This transparency replaces legacy opaque systems, enabling better cash flow management, reducing disputes, and reinforcing trust in B2B ecosystems.
Cost Reduction and Margin Improvement
Data insights identify hidden fees in payment processing, enabling CFOs to modernize payment infrastructure, reduce transaction fees, and recover working capital tied up in slow or manual payment cycles. Automated reconciliation and data-driven decision-making empower strategic vendor selection and optimize liquidity management.
In conclusion, the strategic use of data transforms B2B payments by driving automation, enabling fintech-enabled innovations, enhancing integration, reducing costs, and fostering trust and transparency, which altogether optimize payment strategies in an evolving industry landscape. The potential for data to drive innovation in B2B payments is vast, and it's an exciting time to be a part of this digital revolution.
[1] https://www.forbes.com/sites/forbestechcouncil/2021/08/16/how-ai-is-revolutionizing-b2b-payments/?sh=7f9a5a577608 [2] https://www.pymnts.com/b2b-payments/2021/b2b-payments-ai-leveraging-data-for-improved-efficiency/ [3] https://www.pymnts.com/b2b-payments/2021/b2b-payments-optimizing-cash-flow-with-data-driven-insights/ [4] https://www.pymnts.com/b2b-payments/2021/b2b-payments-api-driven-innovations-reinventing-the-industry/ [5] https://www.pymnts.com/b2b-payments/2021/b2b-payments-orchestration-platforms-revolutionizing-b2b-payments/
In the panel discussion at the Fintech Meetup conference, the potential of technology, particularly blockchain, was raised for B2B payments as a means to tokenize transactions and use distributed ledger technology-based central bank digital currencies for cross-border payments.
The strategic use of data in fintech is transforming business operations, as seen in the areas of automation, centralization, fintech innovations, building trust, and cost reduction. For instance, AI utilized in accounts receivable and payable can streamline operations, reduce errors, and improve cash flow visibility, ultimately leading to faster payment processing and proactive risk management.
