Highlights:

  • B2B buyers are increasingly looking for more financial control and self-service alternatives.
  • Artificial Intelligence (AI) has become more actively invested in traditional banking, lending and financial organizations, who have also happily integrated it into their technological infrastructure.

AI in payment technology can help FinTech startups, banks, and social media payment systems improve their ability to spot fraud and help people pay online.

Peer-to-peer lending (P2P) and new players entering the B2C market have demonstrated enough the revolutionary shift of the digital payment landscape, which is also currently well underway!

Earlier this year, renowned analytical platform CB Insight predicted that the B2B payments industry will grow to a whooping USD 20 trillion.

PayPal and numerous other Fintech firms are just a few payment service providers who have already tried to lessen the strain and the tedious procedures involved in B2B payments. Why it took so long for B2B payments to enter the digital era is the crucial point in this case, though.

Customers of all ages know that B2B interactions that prioritize digital-first mirror the B2C purchases they are accustomed to today. B2B buyers are increasingly looking for more financial control and self-service alternatives.

Hence B2B companies in turn are now accelerating the AI-driven B2B payments process – lowering costs, reducing errors by utilizing Robotic Process Automation also known as RPA, and more. B2B payments still have a lot of catching up to do due to the various levels of complexity in authorizations and the numerous payment terms involved.

RPA is a software technology that helps people do their jobs better by automating some of them. Today’s accountants use tools and processes that depend on computers and involve a lot of manual steps and keystrokes. RPA can change the way accounting work is done by putting together different tasks into a single, smooth, automated process.

B2B Payments and AI Evolution

Businesses were under a lot of stress due to the lengthy, labor-intensive manual methods and antiquated technologies that were the norm for payments until recently. On the other hand, AI has recently become an integral part of the financial system.

Artificial intelligence (AI) has become more actively invested in traditional banking, lending, and financial organizations, who have also integrated it happily into their technological infrastructure. The global investment in AI by the FinTech market would reach USD 22.60 billion by 2025, with a CAGR of 23.37%, if the current development pace continues!

By utilizing information management, accounting efficiency can be improved with RPA powered by AI.

Sending a purchase order, keeping track of invoices, negotiating payment and price terms are standard procedures in a B2B transaction, that have been traditionally labor-intensive and essentially repetitive. From the communication perspective, the various finance intra-departments need to coordinate seamlessly as well. All this is a complex process that is even further stretched in time frames owing to outmoded, isolated, and monolithic systems.

In what ways can AI make B2B payments simpler?

Businesses must improve B2B payment processes better to serve their clients in an increasingly digital world. To reduce time and get rid of human mistakes, AI in B2B payments can help automate payment operations. They are accelerating the procedure and ensuring the satisfaction of all the concerned stakeholders.

Here are some of the primary ways that utilizing AI can assist businesses in streamlining B2B payments:

  • Improving access to credit

AI-enabled credit scoring makes it possible to evaluate enterprises for much lesser the costs than it would have otherwise! Additionally, when traditional financial information is missing, AI systems may remove prejudice and use current and historical data to make credit choices.

  • Identifying and preventing fraud

AI is already widely used in fraud prevention technologies to encrypt or protect customer and supplier data. Machine Learning (ML) is now being used in more advanced systems to help find suspicious behavior or vulnerabilities that people might miss, as well as to find and evaluate potential risk factors.

  • Automating the payment process

Due to eliminating various pointless components made possible by automation, processing and handling payments takes much less time and money.

The changing B2B payments environment

Although B2C payments technology has advanced quickly over the past few years, B2B payments innovation has been significantly slower. The number of parties involved, the number of transactions, and the lengthier payment cycles have all contributed to the gradual process disruption of B2B payments.

Due to the widespread use of digital alternatives like Automated Clearing House (ACH) and Exchange-Traded Fund (EFT) transfers, this figure is gradually falling.

FinTechs are also figuring out novel ways to make B2B transactions more efficient, with AI technology setting the standard.

In conclusion

AI has enormous potential to change the B2B payments landscape and usher it into the digital era, from instantly assessing a company’s creditworthiness to ensuring fraud prevention. Thus, SMBs may free up time and resources for more critical tasks by eliminating the numerous manual payment processes that limit corporate growth.

Financial institutions and B2B FinTechs are working together more and forging collaborations to develop cutting-edge SMB offers that also adhere to regulatory requirements.