There has been a lot of talk among business executives about the use of faster B2B payments. Faster payments can be utilized by organizations of any size and in any business sector. According to an article entitled “Faster Payments: Use Cases and Opportunities” by Levvel, legacy systems may require a transition period from other types of payment systems but those organizations who are willing to take on this challenge will see a “tremendous new opportunity once the industry eventually fully adopts the new tools.” The faster payments system has the potential to revolutionize the payment process.
What are Faster B2B Payments?
This system of payment uses technology to move payments quickly, almost instantaneously, which benefits both the payer and the payee. In accounts payable, using faster B2B payments can mean that accounts are always up to date with payment information. This prevents late payments and helps ensure accuracy on accounts paid. Faster payments may include same day ACH, card network push payments, block-chain based network payments, or clearing house RTP network payments. Many organizations use a combination of these types of payments which is why a faster payment system is ideal for organizations of all types and sizes.
The Good and Bad of Using Faster Payments
Some corporate customers have reported the willingness to pay for faster payments which can benefit both the paying organization and those receiving payment. On the other hand, many organizations base their cash flow on the practice of delaying payments until they’re due. This change of payment practices will be a tough transition for many businesses. It will require a complete change in the way an organization looks at their payment schedule and will mean many adjustments in the automation of accounts payable.
The Future of Business
The next 10 years will likely see a huge increase in the use of faster payments throughout numerous sectors. Organizations that take the time now to learn about faster payments and incorporate them will reap the benefits later if not immediately. The latest in payment technology has led to the expectation of immediate availability of funds. Because of this, it’s essential for organizations to take advantage of early implementation of a faster payment system providing dynamic discounts. Both payer and payee will be able to benefit from the “certainty of delivery” and the “real-time status” that goes along with using faster payments.
Many consumers and vendors are being conditioned to expect “real-time money movement”. This can put those who don’t use a faster payment system at a disadvantage because vendors can choose to work with other businesses who do have a more efficient payment system in place (via AP automation). By implementing faster payments an organization can keep up with the competition and stay relevant in the business world by using the latest in payment technology.