Nearly 70 speakers, 38 panels and 162,997 unique viewers of livestreams across four weeks in October.
The month-long digital confab hosted by PYMNTS, in collaboration with Visa, gave voice to the viewpoints of dozens of C-suite executives and innovators, each with front-row seats to the continued reshaping of the B2B payments landscape.
The month-long series of PYMNTSTV segments was grounded in a simple but provocative call to action: What If? Reimagining Business Payments for the Digital Economy.
Each week took that question to a different aspect of business payments — from simplifying complex business payments use cases to crypto, the consumerization of payments, supplier terms and trade finance.
In his first public interview, only two weeks after taking on his current role, Darren Parslow, global head of Visa Business Solutions, reflected on that theme with the perspective of his new role, 17-plus year career with Visa and more than 25 years in the payments industry.
With a nod toward his current position at the helm of Visa’s business solutions, he said, it’s been akin to a homecoming: “Once you are in the commercial space, you kind of build that DNA. It sticks with you.”
His own experience, said Parslow, has shown that the trend toward the “consumerization” of business, and particularly business finance, stretches back at least to the 1990s. But the pandemic is forcing key players to reimagine processes that have been in place for decades.
Parslow told Webster that at the core, reimagining business payments for the digital economy begins with understanding that CFOs and treasurers want — actually need — the digital ease, convenience and speed that have been the hallmarks of consumer payments.
The reimagination requires the acknowledgement that using new tech and payments can create a more collaborative environment for managing flows in and out of a business.
Payables and receivables are no longer managed as separate jobs to be done, Parslow said, but as an integrated commerce environment, a reimagination where trading partners have the flexibility to make and receive payments on terms that are mutually agreed upon and upheld.
Getting there means bringing buyers and suppliers together in real time, fostering an ongoing dialogue that provides tangible and intangible benefits to all stakeholders.
It’s early innings yet, he said, and the road is long.
“B2B payments are just not where they need to be,” Parslow said. There’s a fragmentation among payables and receivables systems, a lack of data standards and low interoperability overall between buyers and suppliers.
Making the Consumerization of Business Payments Real
At an aspirational level — pointing to what B2B payments could be — is the consumer/retail payments north star. Payments are immediate, efficient, convenient and secure, no matter whether they are taking place across online or physical channels.
By way of contrast, noted Parslow, B2B payments are marked by “inefficiencies, decades-long inertia, and a lack of significant investment in innovation.”
Fortunately, there is no dearth of companies (Visa among them, of course) seeking to address pain points and frictions that exist between buyers and suppliers.
The wheels of progress are indeed turning, he said: CFOs and treasurers all recognize the importance of digital payments to participating in and taking advantage of the digital economy. But fully embracing digital payments at a higher level means addressing the shortcomings of legacy infrastructure, said Parslow.
Rip and replace strategies are expensive and time consuming; increasingly, firms are relying on providers and partnerships to help them modernize operations and streamline payments.
He offered as illustration Visa Commercial Pay, with its modules geared toward mobile payments, commercial card issuance and other options.
In another example, cross-border payments, long stymied by friction and pain points — and marked by long settlement times, low visibility and high FX costs — are also ripe for consumerization.
Parslow noted that Visa B2B Connect, which enables bank-to-bank transactions with tokenized credentials, can “demystify a traditionally complicated process” by reducing the steps and intermediaries involved. Reducing the friction and the multiple touchpoints creates trust between buyers and suppliers.
The Collaboration of Buyers and Suppliers
No matter the use case or the type of transaction taking place between enterprises, fostering an ongoing dialogue and a collaborative approach between buyers and suppliers is key to improving business payments and indeed reimagining them.
Collaboration has been improving in stages, said Parslow.
In the first stage, CFOs and other executives tackled internal process improvements, addressing payables and receivables and automating some of the reconciliation. Moving manual processes and paper-based processes into the digital age has benefited companies’ bottom lines.
The next wave of innovation, he said, builds on those process improvements. “It starts to look at the relationship with suppliers and buyers,” he noted.
Leveraging advanced technologies means that buyers and suppliers are constantly in dialogue with one another as they improve the visibility and timing of everything from invoicing to payment to reconciliation.
By overcoming the fragmented approaches to payables and receivables that have been a staple of B2B, he said, supply chains can tackle the trade gap that currently looms over the B2B landscape.
As estimated by PYMNTS, as much as $3 trillion is tied up in outstanding receivables in the United States alone. Roughly 30% of those receivables are paid late, which bedevils cash flow visibility for suppliers, many of them SMBs that desperately need a steady flow of funds to keep operations humming.
Innovations, including financing solutions and automation, can give suppliers and buyers more leverage in getting paid according to their preferences.
Highlighting the need, Parslow pointed to the fact that many businesses, in the midst of the pandemic and in survival mode, used (and still use) personal cards to pay suppliers — or, if they are suppliers chasing payments, using them to keep the doors open and pay for expenses.
For Visa — with a nod to its card base and its declared goals to move well beyond the cards themselves — transforming B2B payments means creating tangible and intangible benefits, beginning with card payments and branching into flexible products and solutions.
“I can tell you Visa’s going to be active in the [trade finance] space. It will be one of the more innovative places where we make a play, where all of our partners will make a play. I think it will be a hotbed and where our industry is going,” Parslow emphasized.
No One-Size-Fits-All Approach
Those flexible solutions reflect the fact that supply chains are fluid, noted Parslow.
Some buyers need credit, while others don’t. Some firms rely on contract/gig economy workers and need instant disbursement capabilities. As Parslow told Webster, there’s no single product or one-size-fits-all approach that will alleviate all issues in B2B payments.
Different verticals need different solutions, he added, and providers need to take what he termed a “vertical approach” to their offerings in order to address the needs of different companies. In one example, he noted that Visa has been working with Stripe in the Asia-Pacific region to expand card acceptance by healthcare service providers in B2B payments.
The solution leveraged the Visa Payables Automation platform and allows enterprises to enroll, manage and pay suppliers virtually. Suppliers register once with Stripe Connect, input their bank account details and start accepting virtual payments immediately.
For many of these providers, it is the first time they have been connecting cards and accepting digital payments, Parslow said. By extension, consumers have been able to gain access to remote payments — which, in the world of COVID, has been critical from the standpoints of efficiency and healthcare.
“The ease of use, the security, being able to monetize payments immediately from a supplier perspective — increasing cashflow and improving that working capital — these are critical right now,” Parslow said.
During the month-long series of talks, panelists were asked what a “re-imagining” of B2B might look like, a question for which Parslow has his own answer.
He said that Visa’s mandate over the last 60 years has been to shape a future where money can be digitized and moved around the globe — among individuals and businesses — quickly, securely and efficiently.
Reimagining business payments with that mandate as its cornerstone means delivering a “single point of connection” for clients to move money over Visa’s rails, or through its partners and over networks that have yet to be formed.
Visa’s “network of networks” strategy, he said, transforms global money movement in large part by keeping what works. Replacing what does not work involves forging new partnerships in order to create interoperability — with trust and certainty cemented between buyers and sellers.
That will create the interoperability necessary for businesses of any size to do business in a digital economy, regardless of whether “you’re a seller settling cross-border payments in real time, an online marketplace conducting commerce globally or a micro-business accepting payments digitally on your phone for the first time,” said Parslow.
“Along the way, Visa will continue to emphasize that we’re more than a card company. We’re the engine of global commerce.”