Last week I attended NACHA Payments 2015 in New Orleans. I had the opportunity to meet and talk to some of the smartest people in payments, banking and finance today, as well as the honor of participating on a panel discussion “B2B Payments: Waking the Sleeping Giant". My co-panelists were Flint Lane, CEO of Billtrust; Casey Wilcox, Head of FI Sales-Business Development, North America for Earthport; and Jay Singer, Group Head, North America Commercial Products, Mastercard.
The panel was moderated by Erin McCune of Glenbrook Partners, and it was packed, with about 200 people attending. I didn’t go last year, but I understand that turnout for the 2014 B2B payments session was about a tenth of that. The packed room points to increasing interest in the changes happening in B2B payments. Maybe the sleeping giant is about to wake up.
I was encouraged by the level of interest and what it means for Nvoicepay and for enterprises everywhere. With volume of about $38 trillion, B2B represents the largest unrealized opportunity in payments space. It dwarfs the consumer payment market, yet the solutions available over the last 20 years have not delivered. Banks have had a stronghold on this market, but haven’t solved the problem — that much is clear.
In the audience was a representative of a large company who commented, “We have 80 percent of the dollar volume of our spend moving through our bank’s electronic payment system, but this represents only 20 percent of the payments we make. The bank hasn’t solved our problem. “ Sound familiar?
It’s a market that’s ripe for disruption, and new solutions are providing a huge opportunity for accounting and finance teams to use payments as a springboard for becoming more strategic.
Where do banks fit in? They’re trying to figure that out. We know bankers are slow to embrace technology — and change — especially in an area that hits them hard in the margins. That doesn’t mean they’re not interested in the latest developments in the industry. I see interest, but not yet understanding of what these disruptive technologies will mean for them.
Banks will lose their hold on B2B payments. There will always be a need for commercial banks — there just won’t be a need for payments from commercial banks. Not unless they can provide the same kind of visibility, transparency and simplicity as the next generation of technology solutions. And that’s not happening.
Another large corporate customer raised their hand to say, “I don’t want to purchase a bunch of solutions that don’t talk to one another and require custom integration and get stuck implementing a complex workflow.”
I loved Flint Lane’s response. He said, “Cloud-based solutions are built to communicate simply with one another and don’t require any on-premise software. They can and should be up and running very fast and will not lock you into a workflow. They are built to solve this problem.”
We couldn’t agree more. Cloud-based payment solutions are moving customers to 100 percent electronic payments and delivering a return that is three to four times what banks can deliver. Another opportunity this big to elevate AP and finance may not come along for a long time. Accounting and finance professionals should not wait on banks; they should go out and grab the opportunity with both hands.
Follow the conversation about strategic payments on Twitter at @KarlaFriede.