Eenie, Meenie, Minie Mo: How to Choose with All the Different Payment Methods for Businesses
Corporate Payments And Payables
Since Western Union (originally a telegraph company) used their network to make one of the first electronic money transfers more than 125 years ago, there has been a proliferation of services focused on making the movement of money easier, quicker and more cost effective. This has led to a number of different payment methods for businesses, which is helpful, but only if you know how to choose the right ones for hour situation. Over time we have seen the introduction of many electronic methods to move funds, including payment cards (credit and debit), ATMs, Automated Clearing House (ACH) and various global payment schemes. The last several years have been particularly prolific, with the introduction of many new options that leverage the rapid innovation framework the internet and mobile tools provide.
We now have Virtual Cards, Pre-Paid Cards, Cryptocurrencies, Blockchain, Real-Time Payments, Alias-based payments, Mobile Wallets and various payment financing options. These innovations provide many more choices for businesses and a significant opportunity to drive down costs, generate additional revenue streams and strengthen vendor relationship by enhancing end-to-end payment processes. Why then is the corporate payments landscape still dominated by payment instruments that were introduced many years ago? Because with many choices comes much complexity in the decision making process. Sure, a huge array of options gives businesses the ability to explore a wide range of capabilities for payment optimization, but the risk of information overload is a very real trap for corporate finance, treasury and payables professionals! How do you know which options fit best for your organization? How does each impact your current business process? How do they integrate with your financial systems?
What is the cost model? These are just a few of the many questions that need to be tackled when looking at payment optimization. No wonder many organizations simply choose to either stick to the status quo or make incremental shifts that only address a percentage of the problem. There’s no doubt that budget, resource constraints and competing business priorities play a role in this inability to keep pace with payment technology, but I firmly believe that the challenge of selecting the best business payment options among an ever changing set of choices is holding many companies back. It’s a sad reality, because now is a great time for organizations to take advantage of the rapid technology advancements that are available and create a business discipline that continually evolves payment processes. So how can businesses break through the inertia? It starts with first understanding more about emerging technologies, then identifying the technologies and partner(s) that can support business objectives and buildng a model that evolves with the changing payment landscape. There are no right or wrong answers, and there’s no need to feel alone when navigating through this confusing landscape! In our next installment we’ll take a look at what these emerging technologies are, how they’re used and how they can they help your business.