Can new payments technology and regulations that streamline data-sharing help financial decision-makers solve their toughest challenges? Thereâ€™s no shortage of worries. In the 2019 Business Payments Barometer, they expressed concern about fraud and payments, be they real-time, late or international.
The good news is that the evolving payments landscape offers innovative technologies that can make settling accounts faster, simpler and more secure. Those who embrace the new payments landscape â€“ from real-time to mobile-first â€“ have an unprecedented opportunity to make their businesses more competitive.
Not surprisingly, fraud is a major worry. Nearly 80% say cyberfraud is their top concern, followed by making a fraudulent payment and insider fraud. Nearly half say their business was impacted by this in the past 12 months with the average loss being Â£240,092, a sharp spike from last year. Almost 90% of all businesses were unable to recover more than half of their losses, and 47% recovered 20% or less.
Financial decision-makers can prevail, however. Top strategies include real-time transaction monitoring, bank account validation and verification, automated supplier portals that accept invoices only from authorised parties, multi-factor authentication and monitoring employeesâ€™ behaviour. The new Confirmation of Payee initiative is another powerful tool with great potential to reduce fraudulent payments by enabling payers to check in advance that the bank account they are paying into belongs to the intended party.
Real-time payments are much more than accelerated transactions. In fact, they are a way to reimagine and improve business operations, from better cash flow management to greater visibility and flexibility.
Real-time payments are on the fast track to adoption, mirroring the consumer demand for nearly instantaneous transactions. In fact, 90% of financial decision-makers say theyâ€™re set to implement real-time payments by the end of 2020; just over half have already done so.
But real-time payments also come with a cost. The faster money moves, the quicker the potential for fraud. Realigning security measures around Faster Payments and using technology to analyse every transaction are effective solutions; relying on people and processes is no longer sufficient.
Despite legislation to combat late payments, they are still ubiquitous. More than 90% of decision-makers admit to paying suppliers late. Four out of ten say their business has inefficient accounts-payable processes while 35% say theyâ€™re actively guarding their liquidity. That figure rises to 48% in large organisations.
External factors, such as claims of poor-quality products and service or incorrect invoices, also contribute to late payments.
While suppliers and purchasers may view themselves as adversaries, the truth is that a collaborative approach benefits everyone. It leads to better relationships with trading partners and more accurate cash forecasting on both sides.
For reducing late payments in accounts receivable, companies can employ cloud-based solutions for distributing and tracking invoices electronically in real time. This identifies payment laggards and also helps with cash flow.
On the accounts payable side, automation can ensure that invoices are approved quickly. This offers a number of benefits, including flexibility to establish early-payment programmes funded by surplus cash or a finance provider. Faster payments can also reduce the cost of borrowing and smooth cash flow.
As Brexit drags on and international volatility rises, international payments are a major pain point. More than three-quarters of financial decision-makers are concerned about establishing new, creditworthy trading partnerships. A significant 73% fret about transparency in cross-border payments fees, and 76% worry about foreign exchange, tax and tariff changes.
In response, 25% plan to stop making international payments. Thatâ€™s counter-balanced by the 53% who intend to continue and the 10% who plan to start.
Worries abound, but so do solutions. Options range from in-country currency accounts and fixing forward foreign exchange rate contracts, to systems such as SEPA and SWIFT gpi. All these tools enable companies to quickly and safely transfer money, manage multiple bank accounts around the world, gain visibility into fees, and track and confirm payments. Â
Todayâ€™s payments technologies are changing how business gets done worldwide, and companies are looking to specialist technology firms to help them adapt and get ahead. One thing is certain: financial decision-makers who lead their businesses into the fast-changing payments future will have better outcomes and a strong competitive advantage.