Although facing obstacles, the B2B payment industry in APAC is not lacking in innovation. Our recent research on the subject revealed that B2B payment innovations and trends in the region come from three dimensions.
Technology and infrastructure upgrades modernize B2B payment processing
Technologies like cloud and APIs, along with new payment data and messaging standards like Request to Pay (R2P) and ISO 20022 are making B2B payments faster, easier, and cheaper.
Innovations in payment infrastructure are accelerating transactions. Innovations in payments infrastructure are centered around enriching payments with data insights, making payments faster and more transparent. R2P is one such innovation. India has built UPI (Unified Payments Interface) real-time payment infrastructure with R2P features for B2B payments. Another example is the new ISO 2022 payment messaging standard. It standardizes and enriches the data integrated into B2B payment messages to speed up transactions. Fintech vendors like Fiserv have built enterprise payment platforms to deliver these new features faster to banks and regulators.
Cloud payment solutions are coming of age. Cloud-hosted B2B payment solutions are gaining popularity in the industry as the cloud enables more efficient, cost-effective, flexible and scalable B2B payments. Rapyd has created a cloud-based payment solution to modernize invoicing, trade finance and supply chain finance. Payment clouds can complement treasury solutions such as Kyriba to combine digital payment and cash management. TreviPay’s platforms and solutions are all hosted in the public cloud, which speeds up solution deployment, reduces costs and improves integration for its business customers.
APIs simplify cross-border B2B payments. Fragmented payment rails in different APAC countries create barriers for instant cross-border B2B payments. Worldfirst, the cross-border payments arm of Ant Group, leverages Ant’s Virtual Accounts, APIs and digital technologies to enable B2B businesses to collect payments overseas as easily and instantly as when collecting money. money at the national level. Hong Kong-based cross-border payment fintech EMQ has created a unique, customizable API that can integrate with both banks and businesses to offer fast localized payments and affordable exchange rates in multiple APAC countries.
IIntegration and interoperability ease the complexity of the B2B payments value chain
B2B payments are complex and involve multiple systems such as enterprise resource planning (ERP) solutions, accounting platforms, and electronic banking suites. They also leverage a mix of near real-time and batch data processes spread across multiple silos, making it difficult to reconcile this data automatically. Companies in the APAC region need better integration and interoperability to enable end-to-end processing and unify multiple systems, vendors and technologies. Service providers are innovating to meet this demand.
Simplified integrations and user interfaces provide a streamlined checkout experience. B2B payment processing previously required multiple partners and systems, resulting in a convoluted and often disjointed customer experience. FIS’s Worldpay offers a single platform that can integrate with multiple ERP, customer relationship management (CRM), e-commerce and payment systems to provide a streamlined B2B payment experience. Rapyd offers a single customer portal to help B2B businesses manage all bank logins and payment methods in one place by leveraging APIs.
Virtual accounts bring interoperability to meet new digital business models. The booming e-commerce and gig economy in APAC has given rise to a highly fragmented payment landscape in the region. Small and micro businesses involved in these new business models generally prefer to use non-bank payment methods such as digital wallets, which adds complexities for their counterparts. Virtual accounts can alleviate complexity by providing interoperability. Kingdee has developed customized virtual account systems designed for merchants who frequently use non-bank rails for B2B payments to enable them to handle both bank and non-bank payment methods.
New entrants and value-added services offer joint payment and funding experience
B2B payment is not a stand-alone process in a company’s operations, and it is closely linked to financial and treasury operations. However, these processes remain mostly disjoint. We see many innovative players in APAC aiming to connect them and bridge the siled experience by leveraging technology to deliver new value-added services.
Non-financial digital platforms offer payment and lending solutions. ERP, accounting software, and e-commerce companies are leveraging their massive troves of B2B data to digitize payment and lending services. Chinese ERP player Kingdee provides streamlined digital payment and lending services to small and medium-sized enterprises (SMEs) by leveraging customer data insights from the ERP platform. New Zealand accounting software Xero leverages the financial and accounting data of small business customers on its platform and partners with banks to offer a variety of B2B financing services such as invoice financing and a B2B credit card .
Value-added services add flexibility and agility to B2B payments. B2B companies are increasingly demanding payment-based, value-added financial and cash management capabilities. B2B fintech TreviPay offers a credit-as-a-service solution that extends lines of credit and offers flexible payment terms to improve working capital efficiency and accounts receivable operations for B2B businesses. Chinese digital bank MYbank leverages Ant’s blockchain-based Duo-Chain platform to tokenize and split customer accounts across multiple enterprises and SMEs. This helps create more flexible credit-based payment terms and expand credit to underserved small and micro businesses.
This post was written by analyst Meng Liu and originally appeared here.