The Payments Podcast from Bottomline.

Episode Transcript

Owen McDonald: Welcome to the Paymode edition of The Payments Podcast. I'm Bottomline managing editor, Owen McDonald. This series of Paymode-themed podcasts looks at the hottest trends in business payments with Paul McMeekin, vice president of marketing at Bottomline, along with expert guests. In this episode, Paul welcomes Jeff Feuerstein, senior vice president of Paymode product management and market strategy at Bottomline. They look at making business payments and data more secure while optimizing trading relationships in various verticals.

Here's Paul McMeekin and Jeff Feuerstein.

Paul McMeekin: Hi, and welcome to another edition of The Payments Podcast with myself, Paul McMeekin, and we're continuing our special series on Paymode. And today, I'm delighted to have Jeff Feuerstein join me. Jeff, welcome to the podcast and give yourself a quick introduction.

Jeff Feuerstein: Yeah. Great. I help lead the product management team for, the Paymode business. I've been with Bottomline for four years and have spent really the last 20+ years in B2B payments.

Paul McMeekin: Alright. So we're gonna dive straight into it. What are the major shifts in the business payments landscape, and what has changed in the last five years?

Jeff Feuerstein: Yeah. So it's been, just a great ride in the B2B payment space, especially in the US where, you know, 20 years ago, we were talking about the the death of the check and what do we do about paper and how do we fix the riddle of businesses with paper-based processes. And the twist in the last five years has been a shift of paper being totally a cost and error-prone way to approach payments, to really looking at the full end-to-end spectrum of payments and focusing on how we can improve payments processes because of the risk of fraud and security to the business. Right? So the change is key.

This isn't just a cost area, but this is financial risk, a reputational risk, and fraud and security are now really top of mind. So across the business, payments are getting a lot more focus from organizations. The second thing I'd point to is, maybe even 10 years ago, businesses were focused on certainly maximizing cost, maximizing their approach with their suppliers/vendors. The level of partnership and the level of importance of suppliers and what we broadly call 'the trading relationships' is getting a lot more focused. 

And, one great example we see today, is in the real estate market and in certain regions, you know, builders are battling for talented contractors.And so delivering payments on time, in simple electronic methods where it's easy for their vendors to get paid, it's improving the relationships. It's keeping the contractors on to projects longer and it's helping both sides of the ecosystem. So that's been great for the market where businesses aren't just looking at their suppliers as a third party vendor, but looking at them as a supplier and a partner. 

And then lastly as we continue the evolution with technology, the importance of integration of technology is really at the forefront for both finance and for the technology teams that we work with, having tightly-woven integrated solutions, embedded solutions within their ERPs because you want to ensure that there's a really easy-to-use solution for your employees when you're that company. You want to maximize your investment in your ERP.

And so going from not just having a point solution for invoicing or a point solution for AP automation, but weaving these solutions in, embedding these solutions, that's a real priority for organizations.

Paul McMeekin: So that's kind of the last five years - a lot of change has been happening. As a product manager, I bet you get tons of requests for 'how do you balance innovation with the needs of existing customers who may be slightly reluctant to change'?

Jeff Feuerstein: Yeah. Well, reluctance to change is, you know, B2B payments in the US, in just a few short words. Right? So, look, we've got to both be able to innovate for the short-term, for the mid-term, and really the long-term. And, you know, doing that in a balance where our customers are able to consume those innovations is really critical. Right? So, we are constantly, as product managers, balancing the needs of our customers with the short-term revenue play and the long-term vision. Where are the pain points? And let's make we're not building out of our own vision, but that it's really informed by customers, and what their challenges are. And then how we solve for that might use the most innovative solutions. It might use AI, machine learning, or some sort of tool. But what we need to do is make sure that it's built in a way that our customers can take little pieces, if you will, and not necessarily take a lot of risk when they're working with us.

Paul McMeekin: So that leads me to my next question. Is the AI hype real? If not now, when is it going to come to fruition?

Jeff Feuerstein: Well, AI is very real. You know? It is here. It's in practical application at Bottomline, but we are also continuing to invest and learn in new ways to leverage AI. For sure, everything that you're hearing in the media though, and that's speaking to a media guy, is the elimination of knowledge work on humans. 

Is AI and robots taking over? Well, from that perspective, I would say the hype is a bit overblown. Right? It's not eliminating all of the work, and there's a lot of ways where we're still adopting and adapting to the technology. We at Bottomline are strategically advancing our capabilities and, going back to the earlier point, focusing on ways that we can make our customers' lives better, looking at ways to use AI to protect our network, focusing on fraud and security, and making our internal business, our internal solutions much more efficient.

So, let's look at payments as just a simple example. We want to ensure that we're thinking about our network, that we're identifying the suppliers and identifying the predictability, and the likelihood of those suppliers joining the network. When we think about the invoice-to-pay process, we wan to leverage as much AI as possible to reduce coding and manual work for customers. So using inference and machine learning to read and help code these invoices. And then lastly, we wan to use AI to improve the security of the network.

Looking at different ways that these transactions come in, identifying the data elements on the transaction, identifying the originating and the receiving bank accounts, and deciding whether or not this should be scored, with risk or without risk. And so leveraging all of these tools and continuing to invest in them are only going to make our customers' lives and and their work easier - as well as protecting all of the participants on the network.

Paul McMeekin: So you you mentioned the word 'network' a couple of times there and very intentionally. And so what role do networks and ecosystems play in B2B payments?

Jeff Feuerstein: Great question. B2B payments, and the networks for B2B payments are really a huge opportunity to improve what is a fragmented and really often broken process, with lots of people, systems, and paper involved. Networks enable tighter connectivity for trading partners in this fragmented ecosystem, just because moving data and money is risky, and we want to leverage networks to help validate all of the participants, right? We want to improve the standards. We want to raise the level of data. We want to improve security. And networks help secure the entire loop, if you will, of everyone that's participating. A well-performing network promotes a flywheel effect where both parties participating enjoy the benefits, enjoy the improved security, enjoy the standardized data, and hopefully enjoy, in some ways, faster or at least more predictable payments. The flywheel will feed on itself.

Buyers and suppliers will invite each other just like in a LinkedIn or consumer network way where, you know, I might invite you and you might invite your friends, right? We want to encourage buyers and suppliers to participate. And so, if they're enjoying all the value, security, data, payments, in a way that makes it easy, a buyer will invite a supplier, and a supplier will also encourage their buyers to be participants.

Paul McMeekin: The ultimate flywheel effect, right?

Jeff Feuerstein: That's the goal for sure.

Paul McMeekin: If you could give one piece of advice to CFOs, treasurers about the future of payments, what would it be?

Jeff Feuerstein: Well, in speaking with CFOs and the finance leaders that are operating, what's largely a back-office function, my challenge and my ask of them is to always think about payments as more than just a chore, as more than just an activity that we've got to put resources to just to get things done. I want to help, businesses think about payments as a strategic area of focus and help businesses create a payment strategy that can be more than just a cost center, but can be a way for them to improve working capital, improve cash flow, and ultimately improve the area of their business that shines a light on how to find efficiencies where, they're otherwise seem to be riddled with costs and and pain. So, as we think about all the different ways that payments can be made, today, there's more than just moving from paper to electronic, but it's finding the opportunities where you can monetize payments, finding opportunities where you can ensure safe and secure payments until you're leveraging payment networks for all the reasons that we talked above.

Make sure that you're thinking about payments, in a way where you're, securing your organization from the reputational damage. And so you're thinking about fraud, and compliance, in all of this. So let's first and foremost think about how we can go from a lack of a strategy to a strategy step in in the right direction and modernizing your business.

Paul McMeekin: With that, we'll, conclude the episode. So thank you for joining me today, Jeff.

Jeff Feuerstein: Thank you, Paul. This was great.

Owen McDonald: Confronting the twin challenges of innovation and legacy issues, having a balanced view of modernization for optimal customer outcomes, focusing on first principles around relieving client pain points, and leveraging AI. Those are just a few of the insights from this episode. A big thanks to Bottomline's Jeff Feuerstein and to co-host Paul McMeekin. To our audience, the smartest people in B2B payments, thanks for listening. Hit subscribe.

Catch us again on your favorite podcast platforms, including Apple, Spotify, iHeartRadio, and YouTube. Bye for now.

The Payments Podcast from Bottomline.