ET Bureau: What are the challenges that businesses encounter with the current B2B payment systems?
Brandon Spear: As more businesses shift to being conducted online, B2B payment systems are reacting to that challenge. There has been a significant acceleration of eCommerce shopping during the pandemic, as it has disrupted supply chains and created financial pressure for many companies.
B2B customers demand a B2C-like payment experience. While it’s easy to accept credit card payments on commerce websites, it’s much more difficult to offer customers a payment window, allowing them to pay on terms — in 30 or 60 days for example. While this is a standard B2B payment practice, it doesn’t always translate effectively in B2B eCommerce. There are also issues caused by the buyer’s expectation for suppliers to accept purchase orders at the time of purchase.
In the B2B landscape, suppliers face a unique set of challenges. They assume the risk of providing goods and services before payment is secured, and must dedicate A/R resources to pursue past due payments. Suppliers must also maintain an invoicing solution to meet buyers’ requirements, and deploy their working capital to provide buyers with terms.
These aspects of B2B payment systems make both the selling and buying processes more complex. With this in mind, businesses must know how to manage the B2B payment systems experience easily, quickly and transparently.
Additionally, brands are witnessing a fundamental change across industries in go-to-market models. In the past, businesses typically sold through partners or channel relationships, oftentimes only interacting with the largest customers they have.
Many businesses are now recognizing the importance of connecting directly with customer bases to take ownership of their client relationships and remove costs from distribution channels, to compete more effectively in all channels.
This creates another set of challenges, especially for those that are only accustomed to dealing with hundreds of large sellers at a time. For those now dealing with thousands or tens of thousands of end customers at one time, most of the back-office processes designed toward managing this volume of customers aren’t in place yet — businesses must innovate their processes to accommodate this larger scale of buyers.
Online marketplaces continue to reshape the way products and services are sold, pressuring businesses to reconsider their process of selling, which in turn opens the door for many businesses to adopt advanced financial solutions.
ET Bureau: How can businesses leverage advanced financial solutions for exploring new markets and expanding their footprints?
Brandon Spear: Businesses leveraging advanced financial solutions, particularly if they are distributing products or services online, have greater opportunities to explore new markets. Businesses should not feel the need to turn away partners just because they are not in their specific geography. However, without the proper payment solutions, it may come down to that. This is especially true for large enterprises looking for strategies to better support their SMBs that may not have the resources to explore new markets.
If a business doesn’t have any footprint or infrastructure in foreign markets, it’s extremely difficult to maintain an ongoing relationship with those buyers. In most cases, those sellers are going to have to manage through challenges due to being in a different market, such as terms offerings, foreign exchange and invoices that local buyers can consume and use.
By working with financial solutions providers, it’s much easier for both large enterprises and SMBs to expand into new geographies that may not be in the business’ home market.
Additionally, businesses can service that customer base as if it were local buyers. The ability to produce compliant invoices to suit the local regulations of foreign buyers is important, so buyers can consume and manage it properly to comply with the local authority. Financial technology solutions provide unparalleled value to businesses looking to expand their footprints.
ET Bureau: What steps can businesses take to provide a local touch for geo-specific business processes?
Brandon Spear: There are several facets to businesses’ ability to provide a local touch in foreign markets. The simplest is having the ability to interact with buyers in their home language when dealing with foreign customer bases. Inability to communicate with buyers in their language is often the first barrier to offering that seamless purchasing experience to buyers in different countries.
However, language is only the first piece. Businesses must also take into account local tax legislation and rules around how invoices should be produced, and what factors constitute a valid invoice.
The ability to produce tax-compliant invoices in jurisdictions is critical because failure to do this can create problems for the buyer. Doing business in foreign markets can produce many additional layers of complexity, but adopting a strong payment solution can help alleviate the burden of these extra steps.
ET Bureau: How can brands deliver seamless buyer experiences across all the sales channels when it comes to invoices and payments?
Brandon Spear: Whether interacting with a salesperson, purchasing in a physical store or transacting online, the buying process shouldn’t look different to the buyer. This is a crucial requirement for businesses that sell through multiple channels. The customer experience should be the same, no matter how they transact.
Customers should be able to pay online as if they are buying directly from a salesperson. The ability to provide the same experience to all buyers, irrespective of the channel they buy through, is a key to building loyalty and creating a frictionless experience.
From my experience, the businesses that get how to manage this process are the ones that are able to drive a larger share of wallet. But few businesses’ legacy systems can easily accommodate all channels, and that’s where the benefits of a FinTech partner come into play because they offer digital-first solutions that can be integrated into existing systems to create a seamless buyer experience.
Integrating innovative payment tools is key to uplevel the buying experience across all channels, gaining loyalty from buyers and access to customer purchasing behavior.
Brandon Spear is the Chief Executive Officer at TreviPay, where he works to address the challenges that merchants face in B2B Commerce with the latest technology and human touch. His vision is to make it easier for merchants to interact with their customers and provide them with a better experience.