With much uncertainty remaining, businesses must understand and capitalize on emerging trends to better serve their customers and remain competitive.
We’ve witnessed an industry that is traditionally slow to change suddenly accelerate to keep pace with the times. Even when B2B payments were down
Payment companies will need to address the impacts of industry consolidation, pricing pressures, regulation, card-based technology solutions and spotting the proper niche.
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Consolidation has enabled businesses to grow their service offerings as well as break geographical limitations to enhance their offerings. With greater collaboration comes a higher possibility for customization specific to customer needs, enabling stronger service and more efficient payments options. These partnerships will continue to focus largely on partners who offer scalability, innovation and expansion of services.
Customers are now not only demanding excellent service and industry-leading innovation, but lower costs are becoming a greater priority to achieve inherent cost savings. It has become an increasingly essential component as customers are becoming further educated and aware of alternatives that are available in the marketplace.
While price will dominate the B2B payments industry as a differentiator this year, financial service providers and payments processors need to remember that the quality of service, personal relationships, customization and ease of use remain key selling features for current and future customers.
In the next year market entry will pose greater challenges than ever before for new payments providers and fintechs. In the U.S., regulatory compliance is not easy or cheap. New entrants to the business will face greater hurdles when it comes to regulation and compliance licensing across the 50 states, in addition to developing banking relationships. And those with standing licenses must work to further develop their existing relationships to remain competitive.
With an increasingly educated market and customer base, users are becoming more vigilant and aware of the risks associated with global payment processing. Therefore, regulation and compliance for payments providers will remain vital for gaining the trust of new and current customers alike.
It seems we cannot go a day without hearing about a new payment innovation available in the B2B space. From partnerships to new technology, the pace of industry growth is unwavering. From ETF, to ACH payments to Swift wire transfers, myriad options have become available to users. However, this year we will see an uptick in card-based solutions to offer customers a faster and more efficient method of payment. Solutions such as prepaid cards or cards linked directly to payee accounts will enable simpler and faster cross-border and multicurrency payments delivering broader options to businesses operating globally.
And there's also a challenge to find a niche. While vertically focused businesses aren’t anything groundbreaking, this year we will see payment businesses focus a great deal on serving specific industries and not just a wide net to capture SMEs. Businesses will need to strive to find sectors that not only generate revenues but also differentiate them in a highly competitive marketplace. We’ve seen fintechs now pivot to serve industries in their areas of expertise such as travel, health care, insurance, law and education. We are even seeing businesses now being created from scratch in order to serve only one select industry.
The B2B payments industry should focus on growth initiatives, invest in people and systems, and also consider geographic expansion in addition to the trends outlined above. If the past year has taught us anything, it’s also to never forget vision, choice and focus on progression at all levels of business.
