2023 Business Payments Barometer details upside as well as challenges to technology

If we boil down the recently released 2023 Business Payments Barometer to one theme it would be the usage of and attitudes toward payment technology. It showed up prominently in the drivers of change that begins the report this year, with access to the cloud supplanting COVID at the top spot, followed by mobile payments, real-time payments, and AI and predictive analytics. It also showed up in the sections covering payment methods, fraud and cashflow management. 

Perhaps the most compelling view of technology from the 1,600 financial decision-makers surveyed across Great Britain and the United States came via the section that covered its positive and negative aspects. It is here that the two-sided nature of technology became apparent, with respondents citing business costs – for example – as both a positive and negative factor. While some concerns about technology in this context are legitimate, each has a counterargument that can mitigate the fears it raises. We will make some of those arguments here as technology continues to make inroads into key areas such as access to the cloud, AP automation, cashflow management and the AI applications that run within them. 

First, the numbers show a generally positive outlook toward the technologies that are most accessible right now, from the 68% rating (both US and GB) given to the cloud to the 66(GB)/69%(US) for real-time payments to a somewhat optimistic 63/66% rating for AI. More specifically, we probed respondents on the positive aspects for the top four tech solutions, which were (in ascending order) access to pay-as-you-go or subscription-based technology, AI and predictive analytics, mobile payments and easier access to the cloud. Across all four solutions, respondents singled out increased productivity as the biggest positive impact, ranging from 51(GB)/58%(US) for mobile payments to 64/61% for AI. Gaining a competitive edge and reducing business costs also gained significant positive impact votes.

On the flip side, respondents also detailed concerns about implementing the exact four tech solutions. Difficulty keeping up to date with technological advances and the resources required to do so are seen as the biggest concerns for both countries. Falling behind, the concerns over increased business costs to make it happen saw the biggest jump year over year, from 26 to 39% (GB) and 33 to 39% (US) for accessing subscription-based technology and 21 to 36% (GB) and 38 to 43% (US) for accessing cloud technology. 

Concerns about implementing any new technology are understandable, as has been seen lately in the arguments over generative AI. But ignoring payment technology advances can have devastating circumstances for any business that chooses to discount it. With that in mind, let’s look beyond the Barometer’s results in three key areas: access to the cloud, cash flow management and AI.  

Access to the cloud/access to subscription-based technology: These two solutions are similar as most, if not all, cloud-based technology carries a subscription model. The Barometer did show about 36% (GB) to 43% (US) of respondents were concerned about increased business costs. It is a worry, but only if seen through a short-term lens. Migrating to the cloud requires an initial investment for setup, training, and data transfers. It may incur additional costs for integration with existing legacy infrastructure. However, look past the short-term costs, and efficiencies begin to check in, especially if your business scales rapidly. Also: Maintenance costs are 100% the owner’s responsibility for on-premises infrastructures, but in the cloud, they are usually borne by the technology provider. In a business payments context, it’s important to remember that the cloud easily enables new features and functionality. Real-time payments and settlements, for example, or API-based innovation for open banking access, enhanced payment processing and improved fraud detection. And one more thing: financial management spreadsheets often contain embedded macros known only to its principal users. They may have been written by users who are no longer working at the company and changing them to align with new reporting needs can be a significant challenge. 

Cash flow management: The Barometer found significant gains in the use of automated cash flow management software, which is now in place at 59% of all companies in GB and 64% in the US. Those numbers also indicate that cash flow technology still has a lot of runway left. We suspect the major obstacle for companies yet to move away from manual Excel-based processes is usually control. Some companies may find that spreadsheets give them consistent, inexpensive control over all their data, or value in its limited customization compared to a more expensive software suite. And then there’s the adage that “old habits die hard.” On the flip side, scalability and accuracy are essential, especially for larger companies, and Excel often falls short on those counts. Also: Automated cash flow solutions can generate accurate forecasts and predictive analytics much better than manual processes. 

AI: In both countries, the biggest concerns around AI – coupled in the Barometer with predictive analytics – were difficulty keeping up with advances and resources needed to implement them. Both are legitimate concerns, especially as AI continues to evolve at a rapid pace. But the upside for AI in the context of business payments may not be wholly understood, because it is often part of cloud-based solutions or packaged along with other products. For example, within a business payments network, AI can handle customer inquiries and perform other administrative tasks quickly, accurately and efficiently. Perhaps most importantly, it can analyze normal spending and transactional habits of a commercial customer. If an anomalous transaction occurs – one that deviates significantly from the algorithm’s learned patterns – the AI can flag it as potentially fraudulent. AI is much more than the generative applications getting the news headlines. 

The Bottom Line: The Barometer report shows corporates embracing payments technology at the same time they are being challenged by it. The most successful of them will be up to that challenge, and they will do so in the interest of their business and their customers. In the words of Home Depot user experience executive Sean Gerety: “The technology you use impresses no one. The experience you create with it is everything.”