The Next Cost-Savings Trend for Enterprises: B2B Payments Ecosystems

Smart Supply Chain Finance via B2B Payments Ecosystems

Enterprises leverage a complex network of technologies, financial institutions, and payment providers to send and receive payments for goods and services. According to Deloitte, 35 percent of businesses report high processing costs are a major challenge with traditional payment methods.

Manufacturing is the largest industry, making up over 28 percent of B2B payment volume in the US. With a constant flow of funds across the enterprise supply chain, transaction fees add up with every payment, and delays in payment processing time can be a major issue.

Supply chain finance has tried to address these gaps for decades by offering a range of funding options for suppliers without adding time to payment terms (Wall Street Journal). 

Today, embedded finance technology, designed to allow non-financial organizations to offer financial products, presents a new, efficient way to facilitate money movement between businesses through a B2B Payments Ecosystem.

Orchestrated from a single digital ledger, a B2B Payments Ecosystem facilitates peer-to-peer financial transactions between businesses.

A B2B Payments Ecosystem streamlines the flow of funds between the enterprise and its suppliers. The flow of funds that used to be bank-to-bank can instead move from account-to-account.

A B2B Payments Ecosystem Enables Enterprises to: 

Reduce costs. Eliminate traditional bank ACH or wire transfer fees with virtual money movement from account to account.

Settle instantly. Speed up settlement with instant payments made via accounts in the ecosystem. Optimize cash flow with faster access to accounts receivable.

Control funds. Take full control of funds and tie up less cash for liabilities. Businesses can reconcile payments in real-time, allowing them to hold onto funds until the moment an invoice needs to be paid.

Working with a global embedded finance provider to configure solutions, enterprises can meet the business needs of clients, vendors, and partners instead of being forced to fit the parameters of a rigid, legacy system.

Each party within the B2B Payments Ecosystem has the opportunity to expand and adapt the financial services it employs to ensure long-term success. Modular technology powering the B2B Payments Ecosystem provides flexibility to evolve with the enterprise’s and suppliers' ever-changing financial needs.

Reducing The Complexity of B2B Cross-Border Payments 

Moving funds and making payments across geographies is fundamental to global enterprises. A B2B Payments Ecosystem streamlines global money movement with the ability to send and receive payments in multiple countries and currencies from one ledger.

Enterprises can send and receive real-time payments 24 hours a day, 365 days a year, without the constraints — or time delays — of traditional financial institutions.

An organization with suppliers located in multiple countries and operating in multiple currencies can move funds instantly when all parties have accounts within one B2B Payments Ecosystem.

For example, an enterprise can move funds from its U.S.-based account to a supplier’s Mexico-based account without incurring transfer or other bank fees.

Funds flow from one account to another in a single distributed ledger. This same flow of funds persists for transactions that flow from a parent organization to one of its subsidiaries with accounts in the same ecosystem.

Orchestrating transactions through one digital ledger allows the enterprise to fully control the money flow and optimize working capital by keeping cash on hand longer.

The Evolution of Digital B2B Payments is Here  

According to Digital Payments: A Changing Economy Sparks New Priorities for Systems Spending from PYMTS, 80% of manufacturing CFOs said their working capital and credit systems improved from their investments in digital payments technology.

Building for today and into the future, owning and controlling financial transactions across the supply chain reduces costs and speeds settlement times. Cash is better managed and provides greater flexibility to accomplish the most critical business objectives.

As the world becomes more digital and global, the need for efficient and secure payment solutions will only continue to grow, making B2B Payments Ecosystems a critical enabler of growth and efficiency.

If you'd like to learn more about creating your own B2B Payments Ecosystem to reduce costs and increase operational efficiency, contact us today.