Hits of Table of Contents

May 2021 GREATEST HITS OF TABLE OF CONTENTS

Introduction ...... 04 Deluxe CEO: Building The Digital Bridge For The ‘Last 40 Percent’ Integrated Workflows Of B2B Payments ...... 46 Fuel Cross-Border B2B Payments ...... 08

PayFacs Tap Embedded Payments Virtualized B2B Payments: To Improve The B2B Poised To Kill The Paper Check — And The Plastic Card . . . . . 14 Customer Experience ...... 52

Pandemic Wake-Up Call Drives Integrated B2B Platforms . . . . 20 CFOs Seek A Delicate Balance In Collaborative Technology ...... 58 Citi: Accelerated Digital Migration Provides Insights Into B2B Behavior ...... 26 Making Checks Part Of The B2B Payments How Digitizing B2B Payments Leads To New Revenues ...... 32 Modernization Plan ...... 64

B2B Companies Navigate Tricky B2B Report Highlights ...... 70 Cross-Border Marketplaces And Payments ...... 38 Introduction Greatest Hits of B2B GREATEST

o one said the Officer David Petersonexplained , HITS OF modernization of B2B some FinTech providers “pushed payments would be all-in on electronic, and ignored the easy . But at the onset check,” leaving many corporates to Nof the pandemic, chatter among continue struggling with the paper industry innovators began to grow that remains . that companies would — finally! — put down the checkbook . Solution providers are discovering that a multi-pronged approach to There is evidence the last year or so digitization can ease the pain of has undoubtedly created progress in change for businesses that can the digitization of B2B payments — struggle to evolve . Increasingly, that both in terms of accounts payable means offering multiple payment departments’ desire to use ePayment rails including ACH, cards, real-time technologies, and in accounts networks, and even newer rails like receivable departments’ acceptance blockchain or Visa B2B Connect, of them . Yet what it has also revealed in addition to check services like is the importance of developing a lockbox technology . modernization strategy that can meet businesses where they are . This approach can tackle major pain points that have historically stood in Organizations that continue to the way of B2B payments digitization . use checks won’t necessarily be For instance, a multi-rail approach persuaded to completely overhaul can find common ground between their operations just because a new buyers and sellers when vendors B2B payments technology is available . wish not to accept commercial Indeed, as CheckAlt Chief Strategy cards, while other technologies

like Mastercard Track Business That deep integration isn’t merely suppliers,” reflected WEX Vice the lead in guiding their firms through Payments Service can automatically a value for the payer . B2B sellers President of Operations, Corporate disruption and modernization . pinpoint which rail will optimize are also uncovering greater value Payment Solutions Dylan Jones . Regardless of which payment rails the movement of funds between through embedded, flexible solutions and technologies a company chooses businesses . that can provide deeper insight As businesses do migrate away from to embrace, the CFO can guide their into buyer behavior and streamline the paper check, they’ll be navigating organization to adopting the solutions The value proposition of payments reconciliation workflows . According toward payment methods that that will extract the most value from digitization must go beyond to PYMNTS and Flywire research, support their unique needs, and likely their B2B payments modernization electronic payments, too . as explored in the Payments 2021: causing disruption in the current roadmaps . Assessing The Digital Gaps In competitive landscape between rails With the accelerating surge of B2B Business Payment Flows report, a as a result . “As a CFO, there is a lot of opportunity eCommerce adoption, vendors lack of access to data continues to because of the acceleration of need ePayment tools that can be create friction on both the accounts Commercial card volumes that rose collaboration technology,” LoginID seamlessly embedded within their payable and accounts receivable amid pandemic-fueled digitization CFO Vince Man told PYMNTS . “As portals as the business customer sides of B2B transactions . efforts have shone a new spotlight on a CFO, we need to leverage the experience grows increasingly virtual card technology in particular, acceleration of that technology to get important, including when those Meanwhile, for the FinTechs while emerging opportunities for everybody collaborating on creative transactions occur across borders . themselves, as more business real-time rails to optimize receivables ideas, to improve processes and the buyers are willing to accept a fee for through faster access to capital way we do business ”. “Suppliers are also able to improve a better payment experience, that and vital transaction data are also buyer relations by accommodating same visibility into data can unlock boosting the value proposition of With CFOs at the helm, PYMNTS takes their preferred payment choice,” new revenue streams for service migrating away from check . a look at 2021’s top B2B payments Darren Blair, head of B2B payments providers . stories of the year — so far . at Conferma Pay, said in a recent As organizations, their business PYMNTS interview . “It’s going to introduce opportunities partners and financial service for more players to lend, in more technology providers navigate this creative ways, to buyers and evolution, finance leaders are taking

Ravi Thakur Integrated Executive Vice President, Coupa Work flows Fuel Cross-Border

Sinead Fitzmaurice B2B Payments CEO, Transfermate

here are a lot of moving parts in B2B payments that are keeping corporate finance executives busy as they work to modernize and optimize their operations . In 2020, many of the biggest pain points in B2B payments were revealed, particularly when transactions Judd Holroyde Tmove across border . But organizations are rising to the challenge with a renewed Head of Global Product Management, modernization effort that has carried into the new year . Wells Fargo An estimated $10 trillion in B2B payment flows move across border every year, yet only a small fraction of that volume is digital . To make meaningful progress, the enterprise will need to begin looking at B2B payments not as a siloed process, but GREATEST as an integrated, strategic workflow . HITS OF

PYMNTS CEO Karen Webster held a have conversations about what it outside of your core system, it’s panel discussion with Transfermate means for the enterprise to act as very difficult to pinpoint where your CEO Sinead Fitzmaurice, Coupa an ecosystem of interconnected cash flow cycle is, both from an Executive Vice President Ravi Thakur platforms and processes . Rather than AR [accounts receivable] and AP and Wells Fargo Head of Global the transaction originating within an [accounts payable] point of view ”. Product Management Judd Holroyde enterprise resource planning (ERP) to discuss what it means for or treasury management system, When organizations are managing organizations to step back and look application programming interfaces multiple ERPs, bank accounts, and at the bigger picture of cross-border (APIs) have shifted the perception of platforms all across various global payments . where a payment starts and ends . markets, data integration is vital to obtain a holistic view of the payments “We tend to talk about payments as They have also intensified the need workflow . As Thakur noted, the some independent component,” said for finance professionals to close opportunity to consolidate complex Holroyde . “But it’s an end-to-end the gap between a payment and systems through treasury and workflow ”. transaction data, with integrations banking integrations is vast . allowing for a more seamless flow cross-border transactions, said of information . That’s a critical shift Holroyde, but as organizations look as organizations found themselves out into the year ahead, there will needing to access data and make be more ways that data fuels the decisions in real-time amid COVID- formation of vital ecosystems . Marrying Payments With Data fueled volatility . Emerging Ecosystems There were a few standout moments Rather than viewing payments Data connectivity isn’t only important in 2020 for corporates that led to “Having information at your fingertips and data as two “parallel tracks,” within the enterprise’s own a deeper level of understanding to adapt to that environment very, initiatives like the ISO 20022 infrastructure, for instance . As Thakur of B2B payments as part of an very fast is key,” said Fitzmaurice . messaging standard have helped to noted, it’s also key to deepening integrated workflow . According to “From a cash flow point of view, if fuel their coupling . It’s an important connections between corporates and Holroyde, organizations began to you’ve got a decentralized system step toward streamlining their suppliers . Remitting information

from a legacy, siloed ERP system to between themselves that create that the same time, viewing real-time rethink the way money — and data — a business partner continues to be a bridge to progress,” he said . payments not as an independent move across borders . key pain point, he said, and last year process but as part of a broader raised the importance of unlocking ecosystem of B2B payment tools can “I think we’ll start to see a more data to fuel B2B collaboration . also enable finance professionals to aggressive understanding, and be more strategic about how they pay therefore evolution, of the pain “What we saw with COVID is the their overseas suppliers . points in the core financial services move to digitalization,” he said, “and Corporate Priorities Ahead infrastructure,” said Holroyde . now it’s about collaboration . How As these ecosystems of integrated After wading through months of do you get information from your workflows, technologies, corporates uncertainty, the enterprise has gained suppliers? How do you bring it into and their financial service providers a bit more clarity going into 2021 . As your system?” continue to evolve, the mindset of organizations define their strategic how to tackle friction in cross-border goals, their opportunities to optimize This spirit of cooperation fueled by B2B payments will similarly shift, cross-border B2B payments will data is also promoting the creation but not without overcoming some proliferate, but only if they are able to and expansion of ecosystems of hurdles first . reshape their view of the transaction service providers fueling cross-border as an integrated piece of a larger B2B payments . Holroyde forecasted The emergence of faster and real- workflow . that 2021 and beyond will see an time payments, for example, may acceleration of collaboration between further drive the concept of real-time With trillions of dollars’ worth of banks and FinTechs . cash and liquidity management, but cross-border B2B transactions not until corporates can overcome ready to not only be digitized, but “When I look at FinTechs-versus- their hesitations . Both Fitzmaurice optimized, financial service providers financial services, the reality is and Thakur said the continued also have their work cut out for them the competition that those two drive toward integration and data as members of this ecosystem to Watch on PYMNTS TV marketplaces generate actually connectivity can help alleviate generate innovative partnerships concerns, like that of fraud . At

VIRTUALIZED B2B PAYMENTS: DARREN BLAIR Poised To Kill Head of B2B Payments The Paper Check — And The Plastic Card or B2B payments, the have grappled with high costs and pandemic may be the final slow processing tied to traditional, nail in the coffin of the legacy and ultimately inefficient ways paper check — and the of transacting . The discussion came Fplastic commercial card, too . as the shift toward working from home has been a wholesale one — To that end, in an interview with as surveyed by PYMNTS, 38 percent PYMNTS, Darren Blair, head of B2B of individuals work full-time jobs payments at Conferma Pay, said from home; 45 percent work part- virtual payments can alleviate pain time from home . GREATEST points for buyers and suppliers that HITS OF

As Blair told PYMNTS, the drive errors . Onboarding, for example, can “The enhanced data they’re able (STP) means suppliers are able to toward virtualizing payments has take weeks ”. Buyers have to build in to generate through virtualization fully eliminate all manual touchpoints been gaining traction with the the cost of supplier management simplifies reconciliation and gives tied to reconciling payments, which growth in remote working, because into their businesses — and costs are them access to reporting, enabling optimizes AR resource utilization and virtualization solves for three issues especially acute when it comes to them to better forecast future reduces costs . — those pain points, you might say juggling what Blair termed “the long cash flows,” Blair explained . From a — that are experienced by corporates tail of infrequent, one-off suppliers ”. technical perspective, virtualization Even with the benefits of in the present-day operating allows firms to integrate file-based virtualization readily apparent, said environment, regardless of the and API-based functionality into their Blair, many suppliers have been vertical in which they operate . ERP infrastructure, procure-to-pay reluctant to embrace virtual cards . and treasury management platforms “Suppliers often don’t have the point- If not optimally managed, those in an automated fashion . “This is a of-sale infrastructure to accept a issues impact working capital cycles, Streamlining Payments For vast leap forward from the traditional card payment, even if they wanted which in turn can negatively impact Buyers And Suppliers Too payables processes,” said Blair . to,” he pointed out . a firm’s very solvency (and perhaps Drilling down into the payments even survival) as suppliers wait to themselves, virtualization helps With a nod toward suppliers, he said These suppliers often opt for get paid, or even onboarded into a level the playing field between that accepting virtualized payments traditional payment methods, even buyer’s ecosystem . Those pain points buyers and suppliers, noted Blair . means they are able to reduce their paper-based payments, with higher center around cash flow, manual Traditionally, the benefits of card days sales outstanding, as payments acceptance costs — resulting in processes (where employees match and check payments have resided from their buyers are received more slower payment processing (which invoice and payment data), and the on the buyer side of the equation at quickly . That helps to improve cash thus hurts working capital) . To management of suppliers . the expense of suppliers . With virtual flow . get more suppliers on board with payments, buyers gain from being virtualized payments, Blair said, “we Traditionally, when it comes to able to increase their days payables “Suppliers are also able to improve talk a lot about virtualization on managing suppliers, Blair said, “there outstanding by leveraging their buyer relations by accommodating the issuing side . Really, it’s about are several layers of approval, which credit lines on their commercial card their preferred payment choice,” Blair also bringing the acquiring side into increases preparation time and products . said . Straight-through processing

the equation via straight-through “Along with the associated purchase where, as Blair said, many suppliers from their critical suppliers . Thirty- processing ”. data, this virtualized process is were unable to receive payments nine percent of them are actually much quicker and far more efficient from buyers, as they couldn’t get to facing delayed payments from those He described STP as a seamless and secure, while also improving their brick-and-mortar offices to pick customers,” he told PYMNTS, adding process designed specifically to the payment terms for both the up checks . that “the best businesses are making enable accelerated payments to corporate buyer and the office payments a core strategic part of even more suppliers without manual supplier,” said Blair . The continued shift to work-from- what they do ”. hassle, while capturing all of the home environments will only benefits associated with virtual Virtual accounts are dynamic, he exacerbate those frictions, he noted . payment . explained, set for a specific invoice And in an effort to improve the ROI amount for a specific merchant and on payment operations, he said the Illustrating the process, Blair pointed restricted by date, with no plastic pandemic may be the “final nail in the to the hypothetical corporate buyer involved . Buyer-initiated payments coffin” of the paper check — and the who uses their procure-to-pay are delivered directly into the plastic card, too . platform to source and buy laptops supplier’s bank account without any from an office supply firm . The buyer action required from the supplier . “The actual cost to produce a check uses a unique virtual card that is Security is improved, too, as suppliers over a virtualized card is roughly generated upon purchase approval . don’t have to retain sensitive card about $26 per transaction, which The office supply firm, through its STP information, which may make them is quite significant . Overall paper- connection, receives the funds from vulnerable to cyberattacks . based manual workflows are costly the virtual card directly into their to organizations . Now, 60 percent commercial bank account of choice . This streamlined, secure, tech- of C-level execs tell us they want enabled process sidesteps the to have stronger liquidity support frictions seen during the pandemic,

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Rajiv Ramachandran Pandemic Senior Vice President of Product Strategy and Management, Coupa Wake-Up Call Drives Integrated

Sinead Fitzmaurice B2B Platforms CEO, Transfermate

orporate finance teams were not simply tasked with finding ways to continue operations in a remote work environment as a result of the coronavirus crisis . For some organizations, the processes that broke down and the bottlenecks that intensified as a result of the COVID-19 Cdisruption finally lifted the veil on some of the biggest problems in financial workflows — as well as the biggest opportunities to modernize .

As a result, finance teams across the business ecosystem began to prioritize digitization and optimization, and many of them drew the same conclusion: Access to data is imperative to efficient and effective operations . GREATEST HITS OF

According to Rajiv Ramachandran, The Biggest Pain Points, payments that have historically been senior vice president of product Revealed dependent on the notoriously opaque strategy and management at Coupa, correspondent banking system . While every organization is different, the pandemic was a “wake-up many business leaders came to call” for many finance leaders who At the heart of many of these friction realize some common pitfalls in their experienced a jolting breakdown of points is the fact that manual legacy operations that came to light key functions . workflows fail to unlock the valuable When you mix that in the midst of the pandemic . data behind processes like payments “Their entire process of cash and invoicing that can be strategically lack of immediate Among the largest is the ongoing use management, payments and working analyzed to drive business of paper and manual workflows like information with capital came to a screeching halt optimization . This challenge has been invoice processing . the disruption because they didn’t have visibility into present for decades within many their ecosystem,” he told PYMNTS in “Manual invoicing is your worst firms, but when combined with the that businesses a recent interview . “There were cases enemy,” said Ramachandran, market disruption of the pandemic, it where some of these finance teams highlighting its risks and challenges became intolerable . were facing, could not even understand what their related to fraud, errors and inefficient “When you mix that lack of cash visibility looked like ”. auditing . With so many firms, that’s when immediate information with the particularly small and medium-sized Discussing this lack of transparency, disruption that businesses were businesses (SMBs), struggling with you have grave Ramachandran, along with Sinead facing, that’s when you have grave cash flow today, manual invoicing Fitzmaurice, CEO of TransferMate, consequences for the business,” said consequences can threaten the health of the entire dove into the tactics that CFOs can Fitzmaurice . supply chain . for the business. deploy to address the weak points Three important factors behind and wield data to drive total, real- Fitzmaurice highlighted other key organizations’ continued reliance time visibility into corporate finances . pain points CFOs discovered to be on manual workflows, even this particularly acute, including cash far into the pandemic, include management, as well as cross-border

a lack of prioritization, a lack of Ramachandran listed three workflows and, as a result, creates As organizations continue to weave awareness and a lack of leadership fundamental pillars to the enterprise an ecosystem in which data can be through the market volatility, within the enterprise, according to modernization strategy: the accessed and analyzed . Combining implementing change to the Ramachandran . Once organizations elimination of siloed applications, real-time analytics with the context enterprise will not be easy or shine a spotlight on these pitfalls, the consolidation of processes onto of historical data can be particularly painless . As a result, CFOs are no they’re able to move forward with a a unified cloud-based platform and valuable in making more intelligent longer going to embrace digitization truly holistic modernization initiative . the elimination of inefficient, manual choices about key processes, for digitization’s sake; rather, they’re and paper-based processes . Finance including supplier payments and cash going to prioritize data integration and accounting workflows lend forecasting, Fitzmaurice added . and process unification, opening up themselves well to these three pillars, new opportunities for their financial he said, and Fitzmaurice agreed . This integrated strategy also technology providers to embrace strengthens visibility and collaboration, too . Moving forward, Transparency Through Data “It has to be one platform-integrated transparency for both buyer and said Fitzmaurice, will require focusing Though painful, the process of experience, combined with an supplier when supply chains are on the tools that can strengthen uncovering the most significant pain embedded payment solution,” she looped into an end-to-end workflow, transparency and drive corporates points in the financial back office said . “That provides for complete Ramachandran noted, highlighting toward their strategic goals . opened the doors up for CFOs to lead optimization of the supply, demand the opportunity to provide a “single broader modernization efforts across and cash flow aspects ofaccounts source of truth” for businesses “COVID has provided a lot of negative the enterprise . The need to unlock payable and accounts receivable and their partners . When firms are things, but it has shone a spotlight on data stemmed from professionals’ systems — which allow for real-time, managing troves of banking and the need to be agile, to concentrate dire need to gain greater visibility into frictionless decision-making ”. supplier relationships, consolidating on your core business and to access operations amid the hectic volatility data across systems and processes rich information in a fast-moving in order to best react, respond and The platform approach to can unleash the power of data that environment,” she said . predict the next steps . modernization supports the need has historically been stuck in paper for data integration across various and siloed systems .

CITI:

Accelerated ANUPAM SINHA Digital Migration Managing Director and Global Head of Provides Insights Into Domestic Payments and Receivables B2B Behavior et’s rewind to January would likely have been something 2020, a couple of months along the lines of, “Don’t hold your before the world was breath ”. turned on its head . If Lat that time, someone would have It’s not that automating invoice asked Citi Managing Director and generation, banishing checks, Global Head of Domestic Payments automating the cash application and Receivables Anupam Sinha process and systematically removing how long it would take for corporate all the manual touches from treasury organizations to fully accounts payable (AP) and accounts GREATEST embrace digital, he said his answer receivable (AR) workflows weren’t HITS OF

unknown concepts among chief “The finance organization does not Amid the drive toward digitization, As models in the front end of financial officers (CFOs) and treasury have a choice in terms of embracing many firms began to see the value an organization digitize, this departments at the time . But as digital, and all of us have learned in shifting their business models, prioritization of data has carried Sinha told PYMNTS’ Karen Webster, the hard way in 2020 based on the with online channels becoming an over into the back office, too . Sinha at minimum, they were a decade impact it had,” Sinha said . increasingly important focus in that said today’s CFO should focus away from reality . Eliminating checks, change . For some companies, that on how to access, interpret and he would have said, would take the But the digital transformation goes far means a migration away from the monetize data . And we can see better part of a generation . beyond adopting electronic payments traditional dealer-distributor model that data goldrush is omnipresent . or automating invoicing . Rather, and toward B2B commerce and When Sinha talks to clients about His answer as of January 2021, Sinha explained, corporate treasurers direct-to-consumer (D2C) strategies . digital-first developments like 24/7 however, is very different . and CFOs today are grappling with processing and instant payments, the evolving business models and Sinha noted that this online migration conversation is not about speed, he “If you ask me that question today, I transforming cash management provided far more insight into said . think we will easily get to 70 percent strategies . With so much change customer buying behavior . But it also or 80 percent of our clients’ AR afoot, finance leaders must be tactful created new challenges for finance “It is the quality of data that processes being fully digitized in the in how they lead their corporations’ leaders who were seeing funds instant payment brings in that is next year or two,” Sinha said . modernization efforts . flowing in and out of the enterprise getting them to look at completely via new channels . Historically, rearchitecting their processes,” Sinha And these aren’t small shops created payment volumes flowing through said, highlighting the opportunity to nimbly pivot, Sinha said . These digital channels were too low to for finance leaders to automate key are incredibly large, multinational warrant much focus . But when functions like reconciliation and AR . enterprises that may take time digital channels account for half of What Citi is working with now, he to change due to the complexity The Transformative Power Of an organization’s overall sales, the said, is considering how to empower involved . They’re making changes Data data is too valuable for treasurers to businesses that are adjusting now, he said, for a very simple reason: If the pandemic has taught the ignore . traditional B2B business models They have to . enterprise anything, it’s the value of toward a B2C offering through the flexibility . use of that data .

“The question is increasingly [about] The rise of real-time transacting account technology can further how we can try and pull all of that drives treasurers and their banking data connectivity and propel together to provide a more holistic partners away from the legacy batch CFOs “toward a more centralized proposition,” he said . “From a back- model of payments, with strict cutoff and more sophisticated treasury end perspective, they need to be able time and end of day process toward process,” added Sinha . This can be to integrate seamlessly and provide an always-on cash management especially valuable in the areas of that visibility to their own CFOs and strategy . According to Sinha, this cash application and AR, which Sinha treasurers ”. evolution will further increase the said remains the area in need of need for treasurers to embrace the greatest work when it comes to digitization, and for finance leaders digitization . to standardize their processes on a global scale . But the modernization push is underway and, as Sinha said, there Listen on PYMNTS Podcast Recreating The Backend “Rather than doing a lift-and-shift and is no reverse button for the great Key to that integration and visibility digitizing individual processes, how digital shift, which means the only are technologies like application can they look at it more holistically, option for firms that want to remain programming interface (API) standardize their processes, then competitive is to keep moving integrations, artificial intelligence (AI) automate it — and, at the same time, forward . and machine learning (ML), which will make sure they’re moving toward not only be key to connecting finance API-based processes?” he explained . “If there’s one thing that everybody leaders to valuable information, but needs to do, it’s accelerating the also to shifting back-end models For large, multinational corporations whole digitization journey,” said Sinha . of how CFOs strategize cash that operate with multiple bank management . accounts, embracing virtual

How Digitizing B2B Payments Leads DYLAN To New Revenues JONES Vice President of Operations, Corporate Payment Solutions

hen it comes to payment solutions at WEX, fights B2B payments every day . He told PYMNTS recently and accounting that eliminating paper processes processes, paper — among other actions — can Wis the enemy . But like any formidable streamline interactions between foe, it’s not going down without a buyers and suppliers, opening the fight . door for solutions providers to modernize B2B payments, and along It’s a battle Dylan Jones, vice the way realize new streams of president of operations, corporate revenue . GREATEST HITS OF

The conversation came against the The finance departments on both until recently, UI ease and speed have backdrop where the pandemic has the buyer and the supplier sides been hallmarks of consumer-focused accelerated digitization efforts of the transaction are seeking transactions . But the B2B space has for companies across the globe, to maximize cash flow — and been catching up, he said . especially for payments . Part of that payment errors mean cash is journey has been about pivoting to not being used efficiently . New “Buyers are willing to pay to improve new ways to make sure business use cases (for providers) and the this workflow,” he noted — and the Payments will continuity is in place, and at the same reduction of inefficiencies, he said, fees associated with originating time, as WEX has found, 81 percent are all predicated on software payments can create new revenue no doubt be of financial services executives enhancements and improved data streams for FinTechs in this space . say technology and innovation will flows . Another use case ties into embedding front and center generate new revenues . He noted payments directly into software, for FinTechs. that the U S. . B2B commerce market “Payments will no doubt be front and enterprise resource planning (ERP) is a significant one, tied to $25 trillion center for FinTechs . Every business systems, and business management Every business in annual payment flows . they work with needs to send and platforms (across banks and receive payments . The need is FinTechs) . they work with “And when we look at this market, we ubiquitous,” he said . also know that there are incredible As payment processes become needs to send and inefficiencies,” Jones said of accounts Drilling down, he said improving more efficient and companies such receive payments. payable (AP) functions, adding, “We the front-end user interfaces that as WEX have better insight into know that there’s minimal automation buyers use to originate and manage data, he said, “it’s going to introduce The need is across the board . There are frequent payments can improve workflows . opportunities for more players to errors in payments . And when there lend, in more creative ways, to buyers ubiquitous. is an error, the process to rectify Historically there have not been many and suppliers” across, for example, those errors or reconcile payments options — or firms — focused on this secured credit lines and supply chain between parties is challenging . The critical step of B2B commerce . But financing . stakes are high ”. that’s changing, observed Jones . Up

Keeping An Eye On The Paper “We see new FinTechs emerging do something with it,” said Jones, And as Jones reinforced in his almost every month, aimed at while suppliers may get payments interview, that concerted effort Even as the B2B space is pivoting servicing very specific use cases, without the rich data that could will decrease the friction in B2B to digital initiatives, Jones noted, very specific sectors or niches . The speed processing those payments . payments flows and unlock revenue “We don’t expect paper to totally increasing nature of this velocity Smoothing the conversation between opportunities . disappear — certainly not this year ”. creates solutions that FIs and AP and AR needs intermediaries But by and large, the reliance on banks could potentially offer their such as FinTechs, across a variety paper checks is decreasing . customers,” he said . Joint efforts of solutions such as ACH, virtual

“The paper processes in businesses between banks and tech-nimble commercial cards and other options have been established over many FinTechs can take the best that — in automated fashion . years . And they’re ‘burned in’ both parties have to offer (in terms Digital solutions will also be with teams,” he said . “It will take of expertise and solutions), with instrumental in helping AR/AP investment from partners, investment positive ripple effects for corporate departments manage exceptions in from the corporates and their customers . B2B payments, helping to reconcile finance teams and their AP teams Most immediately, providers and them before they become cash flow to start to gain traction and move their customers will have to address pain points . away from paper ”. He added that the “chasm” that exists between the journey toward payments as AP and accounts receivable (AR) Looking ahead, “Full optimization and a 100 percent digital process will departments . full for both AP and AR departments take shape over several years . Along is years away,” said Jones . “And it will the way, he predicted, there will be “The buyer side generally know that take a concerted effort by all parties greater emphasis on partnerships and they can originate a payment and and the intermediaries involved to Watch on PYMNTS TV acquisitions . send a payment over to a supplier take steps in the right direction ”. and they expect the supplier to

B2B Companies Navigate Tricky CHRISTOPHE Cross-Border BOURBIER Marketplaces CEO and Co-founder And Payments

ay the words “online And as Christophe Bourbier, CEO platform,” and most people and co-founder of eCommerce in the payments and payment aggregator Limonetik, commerce business will told Karen Webster in a recent Sinstantly rattle off a few marquee conversation, the online marketplace names: Amazon . Airbnb . Alibaba . The has become an especially urgent online marketplace model that brings consideration for smaller firms across multiple buyers and sellers together the globe that have yet to build is nothing new . But it’s been gaining out their eCommerce presence as steam as the pandemic has shifted robustly as they’d like . Marketplaces GREATEST consumers online to get what they are a platform for growth and scale, HITS OF need . it’s true — but using them to expand

across borders and currencies carries In general, he contended, the processes . All too often, there were risks and challenges . platform is successful “not because limited payment options on offer . Amazon is buying every product Bourbier said marketplaces such there is,” but because it is providing The benefits of the platform model as Amazon, Airbnb and eBay are a forum for anyone selling their will be especially apparent within the “just the tip of the iceberg ”. Moving own products and services to list B2B sector, where merchants can sell forward, he said, business-to- what’s on offer . And as platforms complex, highly expensive industrial In terms of consumer (B2C) firms, business- evolve, they’re able to accommodate products, but will also want to “sell” to-business (B2B) enterprises and commerce across all conduits — add-ons such as delivery, training marketplaces, even franchises will launch their own eCommerce, online/in-store or even and spare parts — reflecting the online markets, as that model “will be curbside pickup . horizontal, cross-selling opportunities it’s not about the best and most effective way to that are embedded in platforms . managing one add new products and services ”. Think, then, of the supplier that sells account for The days of typing in search terms via some of the engine components Google to find who sells what you’re for helicopters or planes . For the a merchant. looking for are gone, he maintained Getting Ready For B2B manufacture, purchase and assembly — and now, the habit is simply to What’s worked for B2C, said Bourbier, of those parts, the critical aspects of It’s about log onto platforms (Amazon is a go- will work for B2B — a vertical that the online purchase lie in 1) finding managing a lot to choice) to see the lowest prices has been stubbornly rooted in what they need online, 2) making and fastest delivery windows . It’s a paper checks, invoices and FX costs sure it will be delivered on time and of sub-accounts. de-facto expectation that what one tied to cross-border transactions . 3) paying for it all . For an optimal needs, one can get with a few clicks Previous industry efforts to bring online experience, said Bourbier, — and it will carry over onto these B2B marketplaces to scale had failed the B2B marketplace must have a burgeoning (and yet to be created) in past decades, as buyers did not user experience (UX) that mirrors marketplaces . materialize or there were concerns the streamlined experience that has over the transparency of the become a hallmark of Amazon (and other sites) .

Buyers and suppliers need help as that digital was not a ‘nice to have,’ Alipay or WeChat transactions . Other they navigate the challenges of cross- but became a ‘must-have ’”. As he times, merchants may want to enter border markets and the payments told Webster, B2B has been marked new markets while maintaining their that move from buyer to supplier . In by complexity, where escrow may relationships with particular gateway consumer-facing commerce, we pay be part of the process and funds providers . Embracing the platform the way we want to pay, and sellers may not be released until (to use as a service model, said Bourbier, We do the get paid the way they want to get the previous example) the helicopter means that Limonetik can keep the paid — and B2B is due for a similar parts are received and inspected . aggregation of all those activities collecting and evolution . behind one API . The complexity mounts when a buyer the marketplace Bourbier noted that Limonetik’s with a long supply chain may need to Limonetik can make payouts to setup. And when platform-as-a-service supports more purchase several items — with one vendors in dozens of countries across than 285 payment methods in 60 transaction — across vendors located Europe, and Bourbier noted that in we go directly to countries — processing, aggregating in different countries . a business model that is different and creating payment methods than other providers such as Stripe merchants and across B2C and B2B channels . “In terms of marketplaces, it’s not or Adyen, “we can interchange any The company aggregates multiple about managing one account for a component of what we do with marketplaces, financial flows into one settlement merchant . It’s about managing a lot of existing components ”. He explained we do so and supports these services with sub-accounts,” said Bourbier . Against that Limonetik’s gateways can be comprehensive reconciliation and that backdrop, he said, a gateway interchangeable with First Data’s or mainly for very reporting tools via API . PSP might hypothetically come to Ingenico’s gateways . Acquirers can be Limonetik because they might not be mixed and matched, too, according to international, “In a way, this is a form of quality in the “flow of funds,” or might not the market . control,” said Bourbier . “Things were know “how to serve some merchants’ complex needs. digital before COVID, but we’ve had sub-account needs or conduct “It’s a white-label solution,” he said of a lot of B2B companies coming to KYC for banks ”. Some use cases: A the company’s offerings, which help Limonetik because they have realized provider may not know how to collect industrial giants such as Siemens

work with local suppliers, as well as channels and networks such as ACH, noted that “in Europe, (especially acquirers, banks and payment service SWIFT and SEPA . in France), we see a lot of credit providers, among other stakeholders . card payments, but we have a lot of “Cross-border is a sweet spot for us,” “As these merchants increasingly go payment by installments as well ”. noted Bourbier, adding that “we do digital, they still want to be paid with Other countries, such as Portugal, the collecting and the marketplace ACH, but they also want to leverage are seeing an uptake in QR code setup . And when we go directly to the digital payments that have been transactions, while in Africa there’s In B2B, merchants and marketplaces, we designed and developed for the been a leapfrogging from cash to do so mainly for very international, last 10 or 15 years . Not all of them mobile . we’re seeing complex needs ”. Limonetik, he added, are eligible for B2B payment,” said handles the know-your-customer Bourbier . No one is going to pay for Alternative payment methods, he the exciting mix (KYC) aspect of onboarding, ensuring helicopter parts using PayPal, after said, are showing “value-add that of electronic that entities are authorized to receive all, he noted . corresponds to the specificities payments . of various industries” as domestic payments and But in a world where credit card transactions take place using the transactions carry what he termed buyer/suppliers’ payment method of digital payments a terrible UX experience and high choice — whether the payer is Airbus transaction fees, he said, buyers and or a small to medium-sized business that use old rails suppliers are looking for payment (SMB) . The Ongoing Digital methods that will have lower costs in new ways, Transformation and capped fees, seeking out new “In B2B, we’re seeing the exciting mix but also of more Drilling down into the pivot that is ways to do bank transfers in an age of electronic payments and digital still underway for B2B on a global of PSD2 and open banking . payments that use old rails in new old-fashioned stage, through the past several ways — as we know them in B2C decades, particularly among smaller Limonetik has been observing — but also of more old-fashioned payments like merchants, B2B transactions have increased adoption and demand for payments like ACH and SWIFT,” ACH and SWIFT. been done through tried-and-true recurring payments, and Bourbier Bourbier told Webster .

DELUXE CEO:

Building BARRY McCARTHY The Digital Bridge CEO For The ‘Last 40 Percent’ Of B2B Payments t’s a digital world – but it still The path from getting from here has plenty of paper . In fact, to there, of course, involves there’s $21 trillion in paper introspection on the part of checks moving around the executives themselves and can be IU S. . economy every year . By any smoothed a bit by digital checks, measure, paper checks are a force to electronic invoices and electronic be reckoned with, especially in B2B payments . payments – and it will take no small amount of effort to remove this “pulp “Pulp friction” was the key topic in friction” from the way buyers and an “On the Agenda” webcast with GREATEST suppliers pay one another . PYMNTS’ Karen Webster and HITS OF

Barry McCarthy, CEO of Deluxe, Frustration Is Off The Charts Take hospitals, a segment of the who said that payments choice market that Deluxe serves with its But in shifting to digital B2B could forge the bridge from paper healthcare payments exchange . As payments, as with any payments payments to those rendered digitally . much as they want to make those transaction, there are two sides to payments digital, it’s unlikely that a the equation — and they must be Though consumer payments hospital will change everything about in harmony, said McCarthy . And that have been digitized and moved to its accounts payable process to harmony has been elusive . Thus far, The payor and electronic forms, there still exists send a digital payment to a supplier, the digital journey has been fraught a “giant, gaping opportunity for B2B McCarthy remarked . the payee with friction, where executives would payments,” McCarthy told Webster, rate their progress, on a scale of one as more than 40 percent of B2B A food distributor or provisioner have to align to 10, at about a two or three — but payments are still being done via arriving at a restaurant would likely their level of frustration at a 10 . on how the dead trees aka the paper check . need payment after the products have been inspected, but before A wholesale shift to digital means the transaction is The “traditional” way of sending they leave the premises, and a paper sender and receiver must both agree and receiving those payments is check was the most ubiquitous way to change their systems — and those going to flow. a multi-step process, including to make that transaction happen . systems must be able to “talk” to one collecting envelopes, printing the But if a tree damaged a homeowner’s another (a basic function of any two- checks, maybe signing them, affixing roof, the digital payment may be sided market, noted McCarthy) . stamps and posting them . And on the highly valued in allowing for repairs receiving side, the checks have to be “The payor and the payee have to to get underway immediately, and deposited . align on how the transaction is going waiting for a check presents friction . to flow,” he explained . Checks are At a high level, firms on the receiving So it’s critical to work with what’s in ubiquitous (“everyone can agree on end of payments would like to have place now while eyeing the digital checks,” noted McCarthy), but digital an alternative to paper checks: They’d future, maintained McCarthy . “The payments solutions are not . like to receive funds faster than a trick here is to find solutions that can paper check can convey them .

live within the existing systems of Health, now has 160,000 payees . Noting the continuing stickiness of how a payor and payee operate their He said the company would build checks, “as a company that prints business,” he said . directories for property and casualty paper checks, we’re grateful for insurers, payroll providers, and other that,” McCarthy told Webster . But, he enterprises in a similar fashion . added, “we are not in the business of just printing paper checks forever . The trick here is Leveraging Deluxe’s lockbox business We’re in the business of also digitizing — which McCarthy describes as those last 40-plus percent of to find solutions Bridges And Moats its “moat,” since Deluxe operates payments ”. Deluxe has been constructing the roughly half of the lockboxes in the that can live “bridge” between paper payments U S. . — incoming payments can also within the and digital payments by building be digitized and posted to payee directories of receivers by vertical, accounts adding payment credentials existing systems enabling its digital payments platform and payees to the Deluxe network . to plug into the payor’s check According to McCarthy, Deluxe’s of how a payor processing system, and digitizing the platform processes roughly $3 trillion checks that those billing systems annually in B2B payments . “We meet and payee operate generate . The company’s payment the payor and the payee where they their business. “switch” routes the funds to the are today,” he said . payee digitally — or via check, if they still prefer — and later this Payments will become increasingly month, an “intelligent router” will digitized, McCarthy predicted — map payment preferences across although payments choice will always its payee directories . McCarthy said be a central, guiding principle as that its Medical Payment Exchange Deluxe digitizes the assets it already platform, which launched last has in place . year in conjunction with ECHO Watch on PYMNTS TV

PayFacs Tap Embedded Payments CHRIS To Improve The B2B WASSENAAR Customer Experience Chief Risk Officer

ising expectations sellers are looking to offer a among buyers, for payments flow that is seamless, both consumers and rather than one that feels bolted on . businesses, are making Ran impact throughout the entire According to Chris Wassenaar, chief transaction experience . That includes risk officer atVersapay , a heightened product sourcing, customer service focus on the B2B payment and, of course, payments . With experience is driving greater interest business-to-business (B2B) brands in SaaS providers becoming payment taking note of the importance of facilitators, otherwise known as GREATEST the payments workflow in driving PayFacs . HITS OF a favorable customer experience,

“You get to control the brand But the competitive landscape of The PayFac model allows that experience for your customers,” he digital commerce is intensifying, company to keep the customer told PYMNTS in a recent interview . leading buyers to want a more within its own realm when facilitating “And what is different about PayFacs seamless payment experience a transaction . For business versus traditional payment processing and leading sellers to retain that customers, this yields a more is, essentially, you are insourcing all customer relationship at the time of embedded and seamless payments of the payments infrastructure within transacting . experience . For the supplier served you’ve worked for your own firewall ”. by Versapay, Wassenaar said the Wassenaar pointed to a Versapay ability of Versapay’s PayFac service months or years Wassenaar described how the PayFac client — a B2B supplier that took to support integrations with back- model can be particularly valuable in the time to get to know everything office systems like ERPs provides for to build up that the B2B ecosystem as a framework about its customer base in an effort robust and holistic management of relationship and that can support the complexities to create the best outcome and transaction data . This could mean and high data volumes of B2B experience for them . If a typical greater visibility into the timing explain that value. transactions, deriving value for both payment processor is used, he said, of a subscription payment, or a buyer and seller . that supplier is forced to place their more automated reconciliation of