4 Ways FinTech Innovations have Transformed B2B Payments and E-Commerce

The growth of financial technology (fintech) has not only changed the way people bank and invest, but fintech innovations are also transforming the way we transact. In the B2B sector, that includes changing and improving the way companies pay for goods and services and use e-commerce.

Specifically, fintech innovations have transformed B2B payments and e-commerce in the following ways:

1. One-Time Use Virtual Cards Facilitate Secure and Streamlined B2B Payments

Digital payments, such as using a credit card online or an app to make a purchase, may be convenient, but businesses are often concerned about security risks. If corporate credit card data falls into the wrong hands, particularly at large companies where it’s difficult to track all activity, companies could end up paying for fraudulent purchases. Meanwhile, vendors face cybersecurity concerns too, as they need to protect customers’ financial information.

Fortunately, the fintech innovation of one-time use virtual cards, which are generated on-demand only for approved purchases, facilitate secure and streamlined B2B payments. Since the cards only can be used once for specific purchases, that reduces the risk of the credit card data falling into the wrong hands. Even if that occurs, the cards would not be able to be reused. Moreover, generating the cards on-demand increases check-out efficiency, as there’s no lag between procurement departments approving purchases and employees being able to complete the transactions

2. Faster Settlements Provide Improved Cash Flow for Vendors 

Another way that fintech has improved payments and e-commerce is through settlement solutions that reduce the time it takes to move money from one account to another. Checks or bank transfers can take several days to clear, and some businesses operate on even longer schedules such as 30-day waiting periods from the time a credit card purchase is made to the time that the payment is delivered into the vendor’s account.

Now, however, payments can be settled almost instantly, where money from the purchaser’s account is quickly transferred to the vendor’s account. As a result of faster settlements, vendors have better cash flow, and having improved working capital enables these businesses to better deliver for customers. For example, an office supply company that receives payments quickly has more capital available to purchase more inventory, which can improve customer satisfaction since items are less likely to be out of stock.

3. Digital Wallets Create Seamless Transitions Between Online and Offline Payments

The advent of digital wallets means that users can keep all their payment-related information in one place online, while also being able to make purchases offline in stores using near-field communications technology.

As a result, employees can more easily adhere to corporate procurement policies, because their payment information is readily available wherever they go. Conversely, if an employee doesn’t have a digital wallet, they might be more likely to use a personal credit card or cash in situations where they don’t have their corporate credit card information available. When the employee then tries to get reimbursed for these purchases, they might find that the transactions were not in line with corporate guidelines.

4. AI and Data Analytics Allow for Real-Time Fraud Detection 

Innovations in AI and data analytics have also improved purchasing security by allowing for real-time fraud detection, which makes digital payment methods more viable for B2B transactions. For example, procurement platforms can analyze corporate purchasing data to identify spending trends and behavior specific to individual users. From there, AI technology can spot suspicious purchases in real time, and companies can then quickly and easily confirm whether or not these transactions are valid.

Without real-time fraud detection, companies might be less inclined to let employees use technologies like digital wallets. Yet because AI and data analytics help companies quickly identify fraud, they can have more confidence in using digital payments and making e-commerce purchases, which thereby enables them to gain the efficiency benefits that these areas offer.                                    

As these innovations show, fintech is transforming B2B payments and e-commerce for the better. To learn more about how your business can use fintech to improve procurement, get in touch with GoProcure today. You can also read more about how our platform improves the full procurement lifecycle.