Transforming Tradition in B2B Commerce
by: David Desharnais
Popular children’s author Lemony Snicket once wrote “Just because something is traditional is no reason to do it, of course.”
And while he most likely had something other than the current state of B2B transactions in mind when he conjured that great line up, the sentiment certainly rings true when applied to a global payments landscape worth 300 trillion US dollars annually.
For all the advancements in payment technology that have emerged in recent years, the systems that facilitate B2B transactions remain largely bound by a legacy of inflexibility that fails to accommodate some of the most basic requirements involved when businesses do business.
Today, most modern payment methods require all variables to be fixed throughout the entire transaction lifecycle. The who, what, where, when and why of a payment cannot change without resulting in expensive and time-consuming disruptions — hassles, delays, penalties, chargebacks.
But payment instructions do change throughout the lifecycle of a payment. In fact, they change a lot.
25–30% of all B2B transactions are marked for change after they have been issued — payments may be split, combined, rerouted, cancelled, rescheduled, partially paid, or otherwise altered, and static payment methods simply cannot accommodate for this.
Thankfully, FinTech innovators are rising to the challenge of disrupting this outdated way of doing business. Responding to the modern needs of B2B commerce, pioneering companies are working to facilitate businesses in their bid to move real money in real time, and deliver the rich data attached directly to the transaction so that they can regain transparency and control over their cash flow.
Editors Notes: This entry has been submitted to the FINTECH Book, the world’s 1st globally crowd-sourced book on FINTECH. Readers that enjoyed this initial abstract are invited to share and like it so that it may be featured in a longer version.