Fintech: SMBs Are Getting On Board With Digital Payments


Experts can teach us how to move toward digital payments and how smaller companies use new fintech trends to smooth out payment operations.

Whether you own a marketing agency, a construction company, or a legal office, paying the bills and keeping track of the books is challenging work for any organization. When things go wrong, traditional finance and accounting methods have traditionally produced stress for everyone concerned, as well as financial ramifications. However, there has been an inflow of new digital payment solutions meant to assist small firms in developing effective procedures. Such procedures as receiving, collecting, and managing B2B payments help them stay competitive.

Experts teach us how to move toward digitizing payments and how small companies may use new fintech trends to improve their operations since working in the payments industry. And you’ll need a good accountant.

Pain Points in the AR/AP Process

Paper checks still accounted for 42% of all B2B transactions in 2019.

However, there are several drawbacks to this payment method, including high processing charges, payment delays, fraud risk, and even payment problems.

Despite the drawbacks of using analog checks and a laborious AP/AR procedure, many small companies have been hesitant to explore other payment options.

However, Covid-19 and subsequent payment-related advances have expedited the pace of digital transformation. Advances allow for several years of mainstream use of digital technology.

When they switched to a virtual workforce, employees needed to adapt their payment procedures swiftly. Employees couldn’t wait for accounting to cut a paper check. Approximately 82 percent of SMBs stated they were modifying how they processed and received B2B payments due to the epidemic.

SMB User Experiences Improved Across The Board

When digital finance solutions and ERP software first became popular over a decade ago, it was with enterprise-sized businesses in mind.

Because big corporations had the means to adopt, administer, and pay for the platform, the sheer difficulty of handling the corporate finances of massive enterprises would drive the industry.

On the other hand, small and middle-market firms lack the resources to support the technical installation. Similarly, the administration of these solutions.

Still, they do not have the exact requirements of major corporations. Fintech of today is the answer.

Well-known solutions of fintech have leaped on the potential to innovate as players struggle to scale down their platforms for smaller sectors. Consumer expectations have shifted beyond the applications they use in their personal lives. Consumers are now expecting the same from the tools they use in their professional life.

Fintechs are creating platforms that aren’t reliant on having dedicated team members to set up and personalize the software.

Card providers aim to dominate the end-to-end process of spending and cost management. SMBs may choose from various technologies to fit their specific financial requirements, including quick onboarding for their finance personnel. The tools are easy to use and accessible, with peer-to-peer distribution and a straightforward approval structure.

The Rise of AP Digitization

There has been an increase in Accounts Payables solutions attempting to address several of these issues. Streamlined workflow, cost reductions are among the first advantages. Enhanced cash forecasting, speedier settlement, and improved customer-supplier relationships are a few more advantages.

However, many businesses invest in AP automation solutions to help with invoicing processing.

New automation technologies are features to automatically code bills and identify data. The abilities grow to automate approval procedures, and even warn things like duplicate invoices and other abnormalities. Roughly 58.7% of firms report they’ve observed fewer invoice processing mistakes after using AP automation technologies.

Cards That You May Use Virtually

Many companies have also embraced a virtual card model. The model allows workers to make purchases and process payments using a single card number.

Of course, it has a spending limit, ensuring more security and transparency.

Virtual cards provide companies with robust controls and real-time data to help them monitor and manage their expenditure. Virtual cards’ digital nature enables organizations to improve their accounts payable operations.

Therefore, the digital nature will address various payment and expenditure management difficulties.

Trends in Digital Payments in the Future

Many of the innovations that Covid-19 expedited are here to stay. That is to say, the digital payments sector is continuously developing as the globe opens up again.

According to PwC, the move toward digital payments and a cashless society will continue: from 2020 to 2025. Cashless payments will rise by more than 80%. However, experts also identified digital wallets as one of the main trends driving the change. Equipped with the usage of digital wallet-based transactions, experts want to see an increase of 7% this year.

Traditional payment providers will engage with fintech and technology providers to develop and fulfill consumer and company demands. Respondents who provide this information were 86% of the financial sector.

Adapting to a Changing Market

Today’s entrepreneurs and investors are more eager than ever to upgrade the financial services sector.

In 2021, 82% of Americans utilized some digital payment. Therefore, these same consumers are pushing harder than ever for their commercial applications and service providers to give comparable consumer-like experiences in their regular business interactions.

Banks are rushing to compete, focusing more on innovation initiatives to satisfy the demands of clients. Numerous fintechs provide innovative expense management and bill payment products, as well as “neo banks” venturing into the commercial sector to service the needs of small companies.

Small companies who want to improve payment and cost procedures should speak to their bank and credit card partners about new digital payment alternatives. Companies will be spoiled for choice when implementing digital payment solutions.

That is to say, big changes are afoot with fintech upsetting the industry and banks establishing competing options. As a result, businesses will benefit from improved cash flow management and simplified operations. It all boils down to how loud the chorus sings above the band.



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