B2B payment platforms are putting an emphasis on payment delivery speeds and offering faster payment rails, writes Omri Mor, co-founder and CEO at Routable, in the PYMNTS eBook, “Endemic Economics: 32 Payments Execs on the ‘Next Normal’ That Never Happened.” And real-time payments to vendors and partners can have a profound impact on business growth well beyond the gig economy.
Over the last decade, consumer and peer-to-peer payments have experienced significant innovation in the way individuals use technology to send and receive funds. Whether it’s splitting a dinner bill, collecting monthly rent or electing to buy now, pay later (BNPL) for a wardrobe upgrade, it’s never been easier for consumers and peers to transmit money electronically. Perhaps the most impressive innovations seen in the peer-to-peer space is the speed at which individuals are able to send and receive money, and transfer funds to their bank accounts. Many popular P2P payment applications provide payees the ability to receive funds and transfer the money to their bank account for immediate use with just a few clicks.
In 2022, the same can be said for B2B payments. With the rise in digital-first payments accelerated by the COVID-19 pandemic and growing industries such as the Gig Economy workforce, payment solution providers have innovated payment delivery methods to accommodate the shift in the way businesses think about paying their business partners. According to a survey commissioned by the Federal Reserve Banks in 2020, many businesses have already begun to implement faster payment solutions such as Same Day ACH or push-to-card and for those who haven’t 9 in 10 business expect to be able to do so by 2023.
Now we’re seeing B2B payment platforms putting an emphasis on payment delivery speeds and offering faster payment rails to businesses that value timely vendor payment delivery. For industries such as marketplaces, real estate and gig economies, businesses are beginning to realize that by delivering payments to their business partners bank accounts in real time, it can have a profound impact on the growth of their own business. Vendors and independent workers love nothing more than getting paid quickly, and the ability to offer instant payments serves as a competitive differentiator for these companies allowing them to improve relationships, grow their network of vendors and increase retention.
One of my favorite experiences has been helping our clients in the real estate industry pay agents faster than they could before. Paying agents on time is a fundamental part of the real estate business payment ecosystem and more often than not we see brokerages being behind on payments. Payments initiated over the weekend can often cause delays when using traditional payout methods, creating a ripple effect on all of your payables. For Routable customers that made the decision to invest in expedited payments, the concern of paying agents within the required window went away almost immediately. We removed stress from the process, and brought joy to vendors. It was an amazing thing to see unfold.
In today’s world where individuals can receive funds through online applications such as PayPal, Venmo and Cash App and instantly transfer that money into their bank account for immediate use, businesses have come to expect the same. For 2022 and beyond we’ll continue to see businesses demand faster and more reliable payment methods from providers. Payments solutions that are able to adapt and offer their customers the industry’s fastest payment rails such as RealTime Payments (RTP®) or payment options such as push-to-debit will experience the most growth because of the strategic impact they will have on their customers’ businesses.