The way B2B payments are made has changed with the evolution of modern business. Today, the core of these processes is automation. Electronic payments in the area of consumer goods have replaced practically all paper checks, and so changes the area of business-to-business financial relations.
Fintech allows businesses to network and connect all over the world, and these relations become of higher quality and strength due to the many transparent processes that lie at the foundation of global Financial Technology.
This article shows a variety of ways in which fintech is transforming the B2B sales landscape and provides the latest examples of fintech companies standing at the forefront of the industry.
Trend #1: Fintech enables B2B transactions to become as fast as B2C
Easier journey & automation of payments
Traditional (in this sense, non-digitalised) B2B transaction happens way later than a deal is agreed upon. Fintech allows you to streamline the contraction & payment process — now it can happen purely online.
The relevant example is Zoho subscriptions. Zoho Subscriptions is a subscription billing software solution allowing you to keep track of the customers, billing cycles, and tax compliance. It works to streamline receiving online payments.
Less churn due to easier contract renewals
The deal is most vulnerable when renewal happens. Fintech allows B2B customers to commit to the renewal separately from paying: they choose the subscription — time and format of the renewal, and when the time comes, they only process the payment. This increases the conversion rate of renewal subscriptions, as there is no need to make a decision and pay at the moment.
Zuora's subscription management platform facilitates this process by providing customers with subscriptions for their customers: they can easily sign up for the products or services that have recurring charges.
Consumer and payer are merging into one person
A traditional B2B transaction involves at least 2 persons: the decision-maker and the one who sends the money (paying an invoice or approving a purchase order). Lower-value transactions are now being served by credit card infrastructure more and more. Well-known examples are Coupa and American Express.
Trend #2: Fintech data empowers sales
Improving KYC processes to focus on the right prospects
While nowadays Know Your Customer becomes a crucial regulatory requirement for fintech companies, the fintech-rich anonymized data provided via the process of verification helps evaluate potential customers and make moves towards the most promising. It also increases the speed of onboarding for B2B customers.
Jumio integrated KYC solutions work in this direction. Apart from cutting down fraud and providing a seamless customer experience, it enables businesses to increase customer conversions.
Smarter chasing process due to fintech data
Nowadays, almost every decision-maker has a digital footprint through which one may pinpoint transactions they initiated recently. Thanks to this data, Payment providers such as Stripe, an online payment and credit card processing platform for businesses, help classify transactions and generate sales patterns that help target further sales efforts better.
Trend #3: Fintech creates new sales channels
Customers use fintech to change how they buy
When buyers need specific parameters for what they need, they can use a whole new approach for purchasing. Let’s consider Coca-Cola as an example. It has its own purchasing process in a system customized for the company: it specifies the parameters of the purchase (what, when and in what quantity is needed). Suppliers are also in this system, and they have to adjust their offer to an existing need without unnecessary steps such as meetings, negotiations, and other. In addition, in the system, one can immediately adapt the payment terms to the price: if you pay earlier, you get a discount that is applied automatically. In that manner, suppliers can adjust the scheme of their sales to the already existing demand and increase their bottom lines by integrating into the platforms and solutions.
This is available also through using such technologies as Taulia, a provider of working capital tech solutions: with its flexible model, the company enables buyers and suppliers to choose when to pay and get paid.
Fintech empowers B2B marketplaces
Moving B2B transaction online converts the process into simple e-commerce shopping. The power of making a deal migrates from a high-level executive to an employee who is directly responsible for success in a respective area. The deal now is several clicks, since the fintech solutions allow businesses to optimize their processes and get rid of unnecessary intermediaries. Instances are Square for Retail, a cloud-based point of sale and retail solution, and Payoneer for Upwork, a third-party payment seller that allows transferring your Upwork (the world’s work marketplace) earnings directly onto your Payoneer Debit MasterCard.
Trend #4: Fintech enlarges customer audience
Facilitation of cross-border trade (everything goes online)
Fintech's latest leaders like Payoneer or Revolut enable cross-border trade making it seamless and low-cost. It is becoming reasonable to sell B2B cross-border in every place of the world where global fintech works. Another illustrious example is eBay.
Larger prospects base for complex services based on fintech innovations
Fintech expands its boundaries in the sense of allowing more customers to consume B2B services. Formerly, early-stage startups would need to create an entity and qualify to receive the full-scale services that they need. Now, they only need an account in fintech. This not only simplifies and speeds up the process, but also allows them to perform complex operations at a higher and more effective level, which is available thanks to the latest innovations in the field.
For instance, Brex offers corporate credit cards and financial services to startups, as well as innovative financial services that are tailored to the specific needs of new entrepreneurs, such as cash management accounts, expense management tools and other financial services.
Expanding to crypto-based channels
Fintech supports crypto-based payments for B2B and opens opportunities for customers who face issues, specifically with cross-border payments. Besides that, crypto-based payments are another way to optimize the processes: the transactions are transparent, the data cannot be corrupted, and there is less chance of human or even machine errors appearing. There are plenty of emerging promising crypto-based platforms, indeed. One of them is the BitPay platform for B2B.
To bring up the rear, there is a plethora of appearing fintech practices and solutions that reshape the traditional way of B2B relations, and it is something that is pretty predictable. A wide variety of payment methods, schedules and additional factors may be involved in buying processes between organizations, in comparison to simpler financial interactions in B2C. In this regard, Financial Technology is the best way to advance B2B synergy and bifurcate it further.