Digital Wallets Drive Operational Efficiency for Strategic Growth

digital wallets for ap automation

Operational Efficiency

It’s not the stuff that grabs headlines but it is the key to growth and profitability, particularly in uncertain times.  In fact, according to a recent survey conducted by HSBC and Forbes, more companies are focused on increasing efficiency as their top growth strategy (44%) than finding new sources of revenues (21%) in 2020.   

For Accounts Payable software makers -- and any business software solution that includes a payment process -- there’s an opportunity to do both by offering an integrated B2B payments process within their solutions.  For many companies, the cost and time involved in managing payments are significant.  It is a pain point that can be exploited by software firms to acquire new customers as well as retain existing ones by offering a new value add.  

Technology and automation, of course, are central to operational efficiency.  Perhaps that’s why accounts payable process automation for many companies is no longer considered a luxury but rather a necessity.  And one key area experiencing dramatic growth as a result of this need for improving efficiency and automating AP from end-to-end is electronic B2B payments.  

Digital Wallets Extend the Benefits of Automation  

The benefits of AP automation include a compelling ROI achieved by eliminating waste often found in AP processes and workflows.   Using digital wallets for B2B payments can extend these benefits through the actual fulfillment of B2B payments by enabling instant payment via wallet-to-wallet transactions.  

Leveraging the benefits of digital wallets for these B2B payments creates a better process for payers and payees and it’s both more efficient and more cost-effective, while providing an incremental revenue opportunity for software makers and service providers. 

Improved AP Workflows

Improved visibility and movement with automated workflows provided by digital wallets enable AP professionals to eliminate the duplication of effort inherent in most payment processes and carry it through to the actual payment, eliminating the unseen duplications involved in the external payment processes that cost both payer and payee.  Eliminating manual and communication errors are a key component in designing improved payment workflows using digital wallets. 

Real-time Payments

Payment delays harm supplier relationships needlessly and when it comes to specific use cases where immediate payments are not in the cards that can dramatically reduce the level of participation and thus the effectiveness of these programs.  Participation is limited when there are onerous business requirements and manual workflows often created in the name of ensuring ‘proof of performance.’  Business processes need to be simple and timely as any MDF or incentive program manager will be quick to tell you.  Payments, once authorized, should be immediate and digital to eliminate further delay.  

Optimal Automation Solutions for B2B

Opportunity loss is perhaps the most compelling reason for incorporating digital wallet based B2B payments into a business software solution.  Creating payment workflows that align to the business needs of companies with largely third-party workforces and supply chains as well as multi-tier go-to-market distribution channels means rethinking traditional roles.  It’s no longer acceptable to simply think that partners and suppliers will simply accept a payments process no matter the cost to them or the delays in payment. 

Efficient Multi-Currency Payments

Facilitating cross-border payments, in particular, offers the best opportunity to improve efficiency for customers and create a higher-margin additional service.   A recent study co-sponsored by McKinsey & Company and SWIFT, found that the cost of providing international payments can be reduced to a level comparable with domestic payments. Doing so, the study found would “require new approaches to fraud, anti-money laundering, and straight-through processing (STP) requirements.” Cost per International transaction, it found, could be reduced by 90%-95%.    

There’s a lot at stake in the payables software market, and the stakes rise as the companies being served get larger and more internationally focused with multiple overseas subsidiaries and distributed financial management responsibilities. 

Multi-currency digital wallets provide a straight-through processing capability that disintermediates traditional banks and financial institutions that are often the biggest cost-drivers in the traditional international payment systems. An intelligent payment architecture and platform also provided the flexibility for firms to manage their payments at both a global and regional/local level based on their organizational needs, while incorporating key automation to address fraud, anti-money laundering in new ways and provide for tax reporting as well.  

Strategic Growth: Operational Efficiency Meets Revenue Opportunity 

Digital wallets create tremendous opportunity for software makers and service providers to both increase the efficacy and efficiency of their offerings and create a new sustainable revenue source while improving customer satisfaction and retention.  

XTRM's digital wallet capabilities, intelligent payment platform, and APIs provide fully embedded white-label payment processes to power B2B payment solutions software makers' solutions.   

If more efficient digital payments are an important feature in your roadmap, drop us a line to see how XTRM can help you put that in place.

 

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