Top 3 payment trends & benefits

Payment digitisation has made the entire process of making payments extremely user friendly. India, where so far cash transactions have been ruling the roost, now seems to be gradually moving towards a cashless mode of transactions.

In the era of convenience, online payment has reduced human dependence to perform the transaction with speed, immediate settlement, paperless flows, and straight-through processing. Many consumers and suppliers are considering themselves more digital than ever before,

Further, mobile wallets or online payment trends show a drastic increase in transactions. For businesses that deal directly with consumers, one must provide the experience consumers want. Otherwise, one is sure to lose them.

Here we wish to enlighten our readers about some payments trends that one can find where businesses are transacting with each other commonly known as B2B transactions:

(1) Flexible Payment Option: Companies offer flexible payment options like making delayed payments, paying in instalments and sometimes offering discounts for “on or before due date” payments. A small percentage of discount is offered to debtors in case of early payments, which help the business maintain its internal cash flow. Similarly, the discount received from vendors helps enterprises maintain profits. Besides this, by paying in instalments, businesses can prioritise the payment. This can help drive loyalty among both vendors and customers thereby helping them retain.

(2) Automated Payments: Rather than worrying about the cumbersome process of issuing cheques and keeping a tab on account balance, clearance of cheques, etc. are replaced by online payments. With technological advancement, the traditional cheque system has been replaced with a wire transfer. Though this process has been in existence for quite some time, the payment trend shows that the black swan event of the pandemic has forced  all companies to opt for online mode of payments via IMPS/RTGS/NEFT. 

Neo banks have also steadily started gaining popularity among the smaller and medium business enterprises predominantly among new businesses which apparently provide a cheaper alternative to traditional banks. Neo banks aim at bridging the gap between services traditional banks offer and the expectations of the customers in the digital age we are in. In fact, neo banks provide additional services in the nature of collection and sending of payments, expenses management and carrying out full-fledged accounting which in turn help business get a complete picture of its cash flow. 

(3) Artificial Intelligence (AI) and Blockchain: Over the past several years, artificial intelligence (AI) and machine learning have started dominating the e-commerce industry, and the Business to Business payments sector is far from immune. AI technologies have accelerated the payment processes, thereby reducing the workload for accounts payable teams. AI also does play a crucial role in fraud detection. AI aids in analyzing huge data and flag anomalies immediately. 

Another payment trend seen in 2022 in the Business to Customer payments landscape is blockchain. The technology behind crypto payments eliminates the need of a middleman, such as a bank, and allows for a quicker transaction. While enterprises operating in the Business to Business domain are still sceptical about usage of crypto, a gradual shift in favour of the same cannot be completely ruled out in the near future.

The Final Word

In the B2B landscape, digital payments, cryptocurrency, etc. are only getting off the ground. However, this doesn’t mean we should not consider cryptocurrency as a payment method. Although it isn’t yet mainstream, in the coming years, cryptocurrency will help remove barriers for global transactions, and it can lower fees by 75% compared to wire transfers. Legacy processes have become such an integral part of the industry that it may take a while for electronic payments to replace them, but there’s no doubt we are heading towards it.

So, instead of shying away from the change, we need to accept and embrace it for the benefit of our businesses.