The Future of Payments in a Post Covid World

Rich Williams: The Business Payments Barometer surveys 800 financial decision makers, allowing us insight into the payment trends of 2020, and the areas businesses are focussing their investment and time on for the rest of the year. Hello, I’m Rich Williams, host of the Payments Podcast, and today we’re talking about the future of payments, and specifically where they’re heading. With me today is Ed Adshead-Grant, General Manager of Payments at Bottomline, and the face behind ‘The Future of Payments’ section of the barometer. Hi, Ed, good morning to you, and welcome back on the podcast.

Ed Adshead-Grant: Thanks, Rich, good to be here.

Rich Williams: Wow, so, fifth year of the report now. I suppose, let’s start by asking what your reflections on the report are, as a whole, over recent years?

Ed Adshead-Grant: Yes, it’s amazing how time flies. It’s year five, and this was something that we put together for the industry. Literally five years ago there was a space to collect the voice of the corporate, the voice of the business, in payments. So, we’ve now got a great timeline over a number of years, where we can track some of the trends and, in particular for this one, it is probably one of the very last snapshots of the business voice just before the Covid hit us in 2020. So, it’ll be interesting to see next year what comes out, and also great to go through this year where, by the way, we’ve doubled the sample. We’re now 800 companies on this one, to really pull out some insights on payments in the UK.

Rich Williams: Yes, very exciting stuff indeed. The format has been largely uniform, so we’ll begin with some of the drivers of change that will have the greatest impact on payments in 2020. So, what were this year’s top results, please, Ed?

Ed Adshead-Grant: Top three, this year, were ‘mobility’, ‘easier access to technology’, and ‘fraud’, concerns on fraud. So, interesting to see these here. ‘Mobility’ was the same as last year, and perhaps we’ll talk about that a bit more, but I think reflects the digital nature of payments. ‘Easier access to technology’ is a large request from everybody out there, I think, who wants to just use technology in a quicker, faster way. Then, ‘fraud’, we’ve always seen that up in the top three for many years, actually, and is still an ongoing battle.

Rich Williams: So, ‘easier access to technology’ has had quite a significant jump this year. Now, what do we mean by ‘easier access’, and why do you think we’ve seen such an upward trend?

Ed Adshead-Grant: I think the access to technology is something that really starts in the consumer worlds, and then comes into the enterprise and the company technology stacks. So, cloud is now pretty prevalent. Paying by subscription makes it easier to digest and access technology. You hear a lot about the API economy, where things are built once and can be used many times. It’s a pingable service to pull into a technology experience. So, if you bring those altogether, I think there’s just a business demand now, that they can switch things on, new services, richer services, given all the underlying technology developments for payments.

Rich Williams: How about ‘cash visibility’? So, I expect that’s something that businesses are placing of the utmost importance at this current time?

Ed Adshead-Grant: Yes, ‘cash visibility’ is a big area. I mean, cash is still king. Never run out of cash, they’ll teach you at business school on day one. So, with Covid that now comes into play, I think this will show up very much so in the sixth barometer, but we already had the trendline here in the fifth barometer, and who knows how much longer cheap lending can continue for business to fund themselves and move forward? But here, we had some statistics right deep down in the raw data that 6% ranked ‘cash visibility’ as their number one element, and it’s moved up to 16% on the data that we’ve pulled this year. So, it’s out there, it’s a concern. They want visibility. They want to sweep it across different accounts, run their business, make sure they’re well-funded and successful. So, I think we’ll see that each and every year, and definitely 2020 barometer, it’s there.

Rich Williams: Now, back in 2018, if you can cast your mind back that far, blow away some of the cobwebs, we noticed that Brexit was ranked number one, in terms of, you know, what was on people’s list of important topics to address, and in this year’s barometer it’s now become ‘changes in the trading environment’. It’s now dropped four places in those two years, so what do you think the cause of that is, Ed?

Ed Adshead-Grant: Well, certainly the link to Brexit is simply that, in many people’s minds, it’s done. The detail is yet to be signed off, of course. We’re looking towards the end of 2020 for all the politicians to sort out trading arrangements, but in terms of being ranked at number one previously, there’s no longer a need. It’s almost like the financial decision makers now know that risk. They’ve put a box around it. You can put a date on it, and you can put a predictability around it. Interestingly, actually, for now, this is something that we’re struggling, I think, all us financial decision makers, around the pandemic- that is a hard one to manage because there is no end date. I think that’s one that’s causing a lot of ambiguity as people sit down and make sense of this data that happened just before Covid, and where they are now, and how they plan forward to make sure they have got a trading environment that will support the sustainability of their business.

Rich Williams: So, Ed, this is the first time that the Business Payments Barometer has gone on to view whether the impacts that have been noticed are positive or negative. Now, what have the results shown, and why the shift?

Ed Adshead-Grant: Yes, I thought this was an interesting element to introduce, the positive or negative perception. When you look at human nature, you have the fear-versus-hope model, where some people say that the fear, the negative stuff, makes people make decisions faster than the hope, positive side. But here, what can we take from this? Well, the ‘easier access to technology’ was ranked as the most positive. So, that was at 64%, and maybe that’s seen as an investment in the business. You’re buying in more toys, better ways of doing things. It’s a purposeful decision to improve the business. You can control the budgets and the accounting around it. The ‘mobility’, the mobile payment piece, was also high. I think that probably reflects the fact that we were digitalising anyway in the industry, and with current conditions and the pandemic, that’s only going to accelerate. Then, the ‘security and fraud’, that came in second on the positive side which, again, is interesting, because fraud, you might see as negative, but if you’re stopping it, you’re preventing it, it’s one of those areas that’s only a win-win if you spend a bit more money on the fraud, to stop it, then you’re preserving your funds. The only loser, if you like, is the fraudster themselves. That’s a big area. It’s one that we look at and research a lot at Bottomline, and there’re various solutions that are worth… And I would encourage corporations to look at, and business to look at, like ‘confirmation of payee’ and ‘sanctions’, ‘in-house checking’. It’s a big area, but one that positively putting investment in, it always pays back.

Rich Williams: So, I think those are the more positive trends explained succinctly. How about some of the more negative viewpoints, Ed?

Ed Adshead-Grant: Well, the negative tends to bring up the regulation, perhaps, unfairly at times. I’m actually a fan of regulation to a certain degree. I don’t see regulation as, necessarily, an evil, negative thing. When used in the right way- and the FCA in the UK is a very positive body in many of its activities, where they’ve introduced innovation, sandboxes, and can be seen as someone who supports adoption of new solutions. They try and stop fragmentation in the market. They sponsor the rights of the consumer. If you wrap it all together, regulatory changes can actually be positive, but here in our data it came through as a negative element, but only for 16% of the time, so it’s not a massive negative outlook on regulatory intervention. My view would be that it’s probably because of forced action onto the business and, often, especially in the smaller business companies, they really want to focus on customer service, trading levels and, you know, some innovation to delight the end user. Being distracted by stuff they have to do, with limited budgets, can be a negative element.

Rich Williams: There we go, a bit of a scoop there: Ed is fan of regulation. Moving on slightly, what have we seen of the differences, depending on the size of the business, so smaller to larger enterprise, for example?

Ed Adshead-Grant: Probably a couple to pick out of this year’s barometer, here, on the size. The smaller businesses were more likely to find that the ‘changes in the trading environment’ was negative. I think that makes sense. They want to trade, they want to build, they want to scale, and anything else is a distraction. So, on the smaller side I can see why actual, top-line results, revenue, turnover, trading, is important to succeed in. But then, if you look at the larger businesses, they’re often more wary of regulatory changes. We had 14% come out on the data this year, and that probably reflects that they are more complex beasts. There’s more complexity in the layers of a larger business, and if they are enforced to make changes, sometimes the ripple effects- it is quite painful to make sure that compliance has gone in correctly, it’s checked and it’s been done properly.

Rich Williams: So, as we head to a close on this podcast, Ed, let’s end on some of the main considerations that organisations listening should be digesting over the coming months.

Ed Adshead-Grant: Well, it’s done at a time when, like I said at the start of the podcast, it’s our last real data snapshot of business thinking before the pandemic really hit, which is a massive black-swan event to distract, disturb, and cater and accommodate around the running of the business. I’d say some clear themes have emerged. The first one is change. We’ve always talked about change in the payment industry. It’s a very busy market right now, with lots of overlay services and innovative elements coming through. I think, with the conditions that have now struck straight after the barometer, there’ll only be an acceleration in the digitalisation of businesses, and how they pay and get paid. I think that’s a big one to digest and take away. There are others around efficiency and fraud that I’m sure we’ll cover on other podcasts. Probably, just the other piece that I would pull out as well is a recommendation that I’ve made once or twice in the past, which is to have someone in your business or corporate who really champions payments, someone who can watch what’s happening, because it is a busy market, with a lot of change and a lot of opportunity. If you can turn the change into competitive advantage, make the way you pay and get paid smart and secure, and part of the customer journey, it can really be a worthwhile investment to have that champion internally scan the market and bring ideas to the boardroom.

Rich Williams: Ed, thanks so much for taking the time to review this year’s results with us, and I’m sure we’ll be hearing from you again on similar subjects in the coming months.

Ed Adshead-Grant: Thanks, Rich, always a pleasure.

Rich Williams: We will be reviewing additional sections of the report in later episodes, but if you just can’t wait until then, you can explore this year’s results first-hand by downloading the 2020 Payments Barometer on the all-new and exciting bottomline.com website. Unfortunately, that’s all we have time for today, but in the meantime you can listen to more episodes on all things payments at the touch of a button, using your preferred provider, and we’ll see you all next time.