Identifying and solving key aspects of global payments friction via the 2022 Global Payment Survey
Why Your Customers Hope You’ll Add Global Payment Solutions to Your Accounts Payable Software
Is AP software missing the boat by not offering digital payments? Are you ready for intelligent digital wallet business applications? Your customers are listening.
It’s mid-2020 and Accounts Payable software is ubiquitous. This is good. In the past few years businesses are opening up to the realities that automating common AP tasks is an essential step in keeping up with competition and looking forward. And because of this, there has never been a better time than now to consider the features this category of software offers. This goes for users, for sure, because the cost-savvy AP department is always going to be on the lookout for ways to be more efficient. But within this evolving market, there are also new fintech opportunities for you, the software providers, to re-evaluate your offering. In this article, we’ll see that there is an oft overlooked aspect of AP software that merits serious consideration: payment distribution, or, more specifically, secure payment distribution via a digital wallet platform. And if you’re not considering this, there’s a good chance you’re missing out on delivering full satisfaction to your customers—while leaving money on the table. Here’s why.
Is AP software missing the boat by not offering digital payments?
Although it is a bit hidden, the info is there if your prospective users want to find it. A cursory search for AP software feature comparisons will reveal a substantial portion of solutions don’t include payment distribution functionality. At the time of this writing, of the 164 Accounts Payable software products Capterra lists, a mere 26 offer Electronic Funds Transfer (EFT) while only 54 list Check Writing as a feature. Even if we are to allow room for a bit of error, that’s still a big gap of missing functionality.
Is it really a problem that the majority of AP software doesn’t offer fully integrated international transaction payment solutions? Well, that’s a fair question. To answer it, first we’ll need to take a look at what users actually want their AP software to do.
The 2020 edition of Ardent Partners’ perennial report “The State of ePayables,” mentions quite a few priorities for AP departments. Three of them paint an especially clear picture.
Of the 205 best-in-class participants surveyed:
- 48% want to improve reporting and data analytics;
- 38% want to eliminate paper invoicing and reduce manual tasks; and
- 27% want to reduce processing costs.
At a glance this tells us–if it wasn’t already apparent–that while AP departments are looking to leverage a wide range of benefits, there is a common thread that runs through them. Automation offers a clear benefit due to the speed and accuracy of taking the monotony of manual tasks and the possibilities of human error largely off the table. Proper analytics are key to making profitable decisions, and it gets much easier when digital systems that offer proper reporting solutions are fully adopted. And of course, reducing costs is a challenge that is as old as business itself and that can, in a sense, be seen as a parent goal to the first two.
However, what’s different with this assertion about cost reduction, is that as the stewards of outbound cash flow, AP departments face ever-increasing demands and expectations to add more value to their companies. And while it’s tempting to roll up many cost reduction initiatives into the scope of benefits provided by automation, there is another angle to approach the problem from: cost reduction that comes from increasing the speed of settlements and reducing the involvement of intermediary banks in transactions ranging from cross-border payments to everyday processing fees–all by providing faster and cheaper payment distribution services.
The thing is, as stated earlier, a substantial portion of AP automation software isn’t offering EFT, much less owning their own money transfer services for businesses. In these cases, the customers benefit from automation and other features, but still bear the full brunt of any transaction and exchange fees. There’s room for improvement, and you can be the one to provide it to them.
Where are you now?
If you’re not currently offering electronic funds transfers, does this sound familiar? Your AP customers make outbound payments, to suppliers, for example. Your solution automates these transactions, resulting in time and money saved for your customers. However, if you’re facilitating these transfers through the traditional model, by, say, providing a payments file to intermediaries, there are fees and delays involved. These two aspects necessarily set a bottom line for the overall transaction speed and the cost that your customers absorb.
Now, imagine for a moment that you could not only handle these funds transfers from A to Z for a customer, but also provide this service outside of the boxed-in, traditional settlement model. What would that look like for them? Faster service with less fees.
Are there really customers out there who would knowingly turn down the double benefit this provides? Not many. But is this possible? Yes. Enter digital wallets.
Are you ready for intelligent digital wallet business applications?
In a previous blog post, I ran through some points about intelligent digital wallets and their role in the changing landscape of B2B payments. Among the most notable for AP departments are how they provide the ability to transfer payments almost instantly—using wallet-to-wallet (W2W) payments to bypass the traditional payment infrastructure—and the granularity and freedom they provide users in terms of currency types.
What are we really talking about when it comes to cost savings? Aggregate fees of 1 to 3% are common when it comes to cross-border transactions. At scale, this clearly becomes cash leakage to be reckoned with a prime candidate for cuts in a cost-conscious AP department.
The speed and convenience of a digital wallet payment platform with near-instant W2W movement, combined with a cross-border payments infrastructure that includes onboard currency exchange means near-instant global payments at a fraction of the current cost.
What would that look like for you?
A new service offering. A new revenue stream. A new opportunity to build upon the trust that your customers already have in your products and service.
Making the choice to drive down customer costs through international payment solutions.
Software offerings are always performing a delicate balancing act to determine and ship the features that customers need and want. Every once in a while, opportunities come around to present a feature they never knew they wanted until they saw how it could change the way they do business. By adding a W2W global payment system to your platform’s arsenal of useful tools, you can capitalize on a unique opportunity to provide a sweeping change towards AP departments’ goals to keep more cash in-house. Now that the word is out, what will you do?
If you’d like to learn more about how XTRM can help you set up Wallet-to-Wallet payment distribution to delight your customers, just drop us a line.
Ready to test it out? Read this to set up an XTRM sandbox account.