The global B2B payments landscape has undergone a metamorphosis in the wake of the COVID-19 pandemic, beyond a predictable decline in cash usage and shifting preferences towards electronic and e-commerce transactions.

Technological breakthroughs such as open banking and fintech innovation have changed the cross-border payments market and forced enterprises to infuse new payment technology into their current business models before the next wave of disruption.

Modernizing payments infrastructure

According to industry pundits, the pivot towards modernizing payment systems is expected to continue into 2022. In PwC Global’s recent report on the payments industry, 86% of industry insiders agree that traditional payments providers will collaborate with Fintech and technology providers as one of their main sources of innovation.

As digitization becomes faster and easily accessible, cross-border real-time payments are quickly becoming the norm in the global payments ecosystem. This trend will likely continue in the year ahead as the desire for digital wallets and e-commerce grows. While real-time payments are certainly not new to the industry, in 2019, FIS calculated that 54 countries had activated real-time payment systems—a fourfold increase since 2014.

Given the rising number of payers and payees entering the e-commerce marketplace and the advent of Gig economy along with remote/hybrid workplaces, this rapid shift has created a demand for integrated payment gateways that offer frictionless checkout and enhancements in diversified payment methods. Meeting these demands is becoming a competitive imperative for financial organizations as new payment channels emerge and gain traction.

Addressing buyer/seller pain points through automation

Preventing payment fraud and financial crime continues to be a concern for many businesses. According to PCI Pal research, nearly 44% of Americans, 38% of Brits, 33% of Australians, and 37% of Canadians have been victims of a data breach or cybercrimes. These numbers will grow in the future as digitizing all aspects of payment processes continue and criminals look to exploit vulnerabilities in company software and payment flows. It is imperative to select a payment solutions provider that places data protection and innovative security measures at the forefront to help safeguard their clients from unnecessary data theft. 

Automated/digitized payment processes with embedded fraud prevention and detection procedures can help mitigate this threat. While many different automated processes can be integrated into the everyday workflow, applications that allow your business to note abnormalities while also identifying trends in data are key for detecting and preventing fraud at scale. Such systems aid cybersecurity by ensuring sensitive information doesn’t fall into the wrong hands and helps to eliminate the potential for human error.

Automation can add value throughout all levels of a business, from improved payment deliveries, vendor relationships, and data collection and analytics, to improving the customer experience across the board.

AI and machine learning

AI for payment providers and financial services companies is also an emerging trend. This technology can help analyze historical data and behaviors to predict consumer patterns and make informed decisions. Additionally, thanks to machine learning, functions such as fraud detection and many routine transactions can now be automated.

Managing enormous volumes of data has made compliance and security two major challenges for many payments and financial services companies. Using machine learning/AI tools, like API integrations, can reduce human error from manual inputs while streamlining compliance activities and detecting unusual activity.

Staying relevant in a rapidly evolving digital landscape

With innovations driving the payments sector, collaboration between in-house technologies and modern fintech ventures continues to evolve. With the rise of digital ecosystems, regulatory changes and shifts in the payments landscape, these types of evolving partnerships are essential. They help ensure a seamless digital customer experience while establishing a stable client base and a secure line of payments.

Traditional institutions, often encumbered by legacy systems that don’t have the capacity to meet the new customer demands will need to shift their attention to digital marketplaces to stay afloat. Soaring digital payment volumes are leaving many professional services, such as banks, vulnerable to disruptive competition. Unless these organizations can quickly and seamlessly integrate these new channels, they will struggle to retain and grow their customer base. Enterprises that remain ahead of the curve through early adoption of these payment rails will find themselves at a considerable competitive advantage in the foreseeable future.