Category Archives: Supplier Payments

B2B payments: Are digital wallets for business here to stay?

Digital wallets have been popular in the consumer world for some time, enabling shopping online (e.g., PayPal), instant money transfer (e.g., Venmo) and payment at retail (e.g., Apple Pay). The aim is to store your credit and debit card numbers in the cloud and access them from your phone or laptop.

Over the last year, there has been a huge investment by the payments community to create digital wallets for business customers. PayPal, of course, has been in this space for some time. But emerging B2B payment companies see wallets as a revenue opportunity. When money goes into a wallet, there may be additional foreign exchange (FX) conversions and transfers to customer-owned bank accounts.

Are intercompany payments the next frontier for B2B payments?

As companies become bigger, they establish legal entities in other jurisdictions, which can include distribution centers, sales offices, buying offices and so forth. Intercompany "due to" and "due from" balances are created through the natural course of business between these entities as they buy and sell to each other. Intercompany invoices must be settled in a timely fashion in accordance with intercompany payment terms and/or service agreements.

While intercompany payment data is not tracked, the U.S. Census Bureau and U.S. Department of Commerce collect information that reveals related-party trade accounts — in 2016, the nation’s international related-party trade accounted for 42.4% ($1,537.4 billion) of total goods.

Some source-to-pay suites have made tremendous strides in adding payment functionality to their toolkit (including digital payments, virtual card payments, cross-border payments, etc.), such as Coupa Pay and Tipalti. Additionally, many B2B payment solutions can manage sending money to subsidiaries to fund their local operations in local currency.

Are treasurers ready for real-time B2B payments?

supplier network

What is the value proposition for a corporate treasurer to make a real-time payment to a supplier in the B2B world? When real-time payments (RTP) began three years ago via The Clearing House organization, the move was considered a disruptor. But let's take a look now.

Going beyond a marketplace model for working capital: Funding a supplier’s suppliers

Do large anchor companies in the Automotive, Technology, and Consumer Brand or other global industries want to establish their own marketplace for working capital that can extend beyond their direct supplier relationships and go deeper into the supply chain?

That is a question worth asking, because certainly the technology is there to do so.

PPC: On Late Payment — Regulate, Shame or Just Deal with It?

There was some recent shaming of some very large companies by the UK government that did not comply with the Prompt Payment Code (PPC). Seventeen large companies, including heavyweights such as Vodafone, Rolls Royce, SSE and British Sugar, were suspended pending promises to fall into line.

Short of legislation, shame can be a tool. But when we think of the damage that large corporates have done far beyond late payment (i.e., Purdue Pharma & the opioid crisis, Lehmans & the Financial crisis, etc.) without paying any price, you have to wonder how effective shaming will be.

Why Payment Companies are Missing an Opportunity with Early Pay

Small Business Credit

David Gustin is the chief strategy officer for The Interface Financial Group responsible for digital supply chain finance and is a contributing author to Trade Financing Matters.

Facilitating B2B payments is certainly the “in” thing these days as witnessed by some of the more recent acquisitions — see Jason Busch’s Spend Matters’ post Another Payment Provider Gets Acquired.

Why all the excitement? The market sees opportunities around three areas — interchange fees, cross border payments and FX.

For many payment companies that deliver solutions to automate payments and accounts payable, their core value proposition, infrastructure and business model are built around converting their clients’ suppliers to card payment.

Pricing Power and Playing with Payment Terms

savings

For many large companies, extending terms is the easiest way to hold on to cash and make working capital your suppliers’ problem. There are countless examples of large public companies with terms that seem to go beyond common sense.

Will this stop? Is this morally right? I’m not here to pass judgment, but what I would like to better understand is how will inflation impact a supplier’s ability to pass along price increases.

Christmas, Bitcoin and Getting Back to Original Intent

At every Christmas party this past year I was asked about Bitcoin.  Given I recently taught a FinTech course I developed for Simon Fraser University, […]

Will Lack of Regulation Kill Cryptocurrency Use for Supplier Payments?

I received a lot of commentary from last week’s piece on paying suppliers using cryptocurrency. Many commented about the lack of regulation, implying that money […]

Is it time to Start Paying Some Suppliers Using Cryptocurrency?

Ripple, BTCCash, Bitcon, Etherium, the list goes on. Can it get any more confusing? With FOMO or fear of missing out, buying crypto wallets is […]