Last week Glenbrook conducted an “Opportunities in B2B  Payments” workshop in New York City.  Erin McCune and I led the workshop, which was attended by product strategists from card networks, NACHA, The Clearing House, major banks, processors, software and service providers and payments start-up companies.  The group had significant experience in B2B payments and shared a common interest in understanding the “gating factors” that apparently constrain the rate at which B2B payments are moving from checks to electronics.  (Today nearly three-quarters of B2B payments remain stubbornly paper check.)

Some of the more interesting discussions during the two-day workshop were around these topics:

• What model will succeed when it comes to supplier directories? If a company wants to tell its customers to pay it electronically, will it always have to contact each customer and make bilateral arrangements?  Is it reasonable to imagine that there might be a cross-payment system directory? (“pay me with ACH like this, I accept these cards, send wire transfers here”).  If so, it seems more likely to succeed if it is self-provided data – but what about data privacy?  Could more industry acceptance of UPIC (or a UPIC like structures) enable this concept?  One participant suggested that “what we need is a LinkedIn for businesses.”
• How can marketplace confusion be reduced? Many companies appear to be bewildered by the numerous different options, and the lack of common terminology for them (exactly what is “EFT”?  “buyer initiated payments”?).  Could industry collaboration on terminology (what we talked about as “brand with a small ‘b’ ” – see previous post on this topic here) help?  How about a standardized set of trade terms specifically referencing EFT payments?
• It appears that the work on remittance data standards in both the EDI and XML worlds may start to bear fruit as more companies send, and more accounting packages are equipped  to handle, standardized remittance data.  Might a company’s preferences for remittance data be lodged as a callable service in a supplier director?
• There was broad agreement that the intersection of small business payments and cross border payments represented an interesting opportunity.  Will the successful solutions to the payments requirements of small businesses sourcing (or selling) abroad be delivered out of bank-centric payments systems, or, perhaps, by the non-bank eCommerce oriented payments solutions?
• Streamlining the procure-to-pay process enables companies to take advantage of early payment discounts, generating significant returns through A/P efficiency. In the current economic climate, these discounts, and more robust dynamic discounting capabilities, have become increasingly important as a means for powerful buyers to sustain their supplier networks.
• Funding and IT resources for corporate back-office improvement efforts often remains elusive when competing with the revenue side of the company. Yet, electronic payment and automated receipt of payment-related remittance data, provides a wealth of sales and supply-chain information that can drive increased revenue and reduce costs.

If  you are interested in contributing to this discussion, post your comments here or contact either myself or Erin McCune.

And if you are interested in learning more about Glenbrook’s Payments Education program, visit here. In addition to public workshops we offer private classes on site at your location, based on special topics (such as “Opportunties in B2B Payments”) or our core Payments Bootcamp curriculum, or some combination.