Versapay Weekend Digest – November, 2021

As we approach the end of 2021, let’s take another look back at some B2B payments and accounts receivable news headlines that caught our attention this November!

46% of Firms Using ACH for More B2B Payments Amid Pandemic

At first glance, the title of our first article might not seem too enlightening. But if you look a little deeper, you’ll find great insights from new research done by PYMNTS.com.

One of the primary responsibilities of the CFO is to help their organization weather any storms that come their way, and that has never been the case more than in the last 20 months! To keep their organizations afloat and thriving, CFOs turned their focus to digital innovations to improve their organizations’ payment operations for the long haul.

In fact, 71% of 400 financial executives interviewed by PYMNTS said they have accelerated their payments digitization in the last 18 months, and nearly all of them are making and receiving digital payments more often now than they were prior to March 2020. This uptick in digital payments is matched by a decline in payments being made and received via traditional, manual and paper-based formats like cash and checks.

The biggest mover amongst digital payment options are credit cards. Whether through a supplier portal or with digital wallets, credit cards are outperforming other digital payment methods. 85% of CFOs say their businesses are making more of card-enabled payments now than during March 2020. Other digital payment methods that have seen increased usage include direct deposit (71%), PayPal (62%), debit card (55%), wire transfer (50%), and ACH (46%).

Of course, it’s important to understand why these CFOs are putting greater emphasis on payments digitization now than before. Previous PYMNTS studies have shown that CFOs digitized their operations to improve the customer’s experience and improve back-office efficiencies. But this latest survey finds CFOs believe investing in digital payments projects now can improve the overall health of their balance sheets, with 59% believing payments digitization is integral to a healthy balance sheet, while another 38% said they accelerated payments with their balance sheets in mind.

It is evident from this article that payments digitization is playing an active role in CFOs’ broader strategies for improving the health of their organizations. Those executives who invest more in digital payments operations believe their efforts will result in stronger and healthier balance sheets –?whether that comes in the form of enhanced working capital, streamlined AR/AP processes, or improved customer satisfaction.

For more on PYMNTS' research, take a read through the full article for yourself to learn more.

Buy Now Pay Later (BNPL) transactions heighten risk of fraud

Our second article comes to us courtesy of the Cash & Treasury Management file (CTMfile) and lends itself to ‘Buy Now, Pay Later’ (BNPL), something we've talked a bit about in recent blog articles.

Most people would agree that Buy Now, Pay Later is generally good for business. It enables suppliers to offer customers flexibility by acquiring goods or services now and paying for them at a later date. But this added flexibility can come at a price by introducing new risk for potentially fraudulent buyer behavior.

Consider that since the beginning of the pandemic, online shopping has – unsurprisingly –?increased significantly, with BNPL transactions alone skyrocketing 182% YOY from June 2020 to June 2021. Within this explosive growth of BNPL transactions, fraudsters have learned to apply certain techniques when making purchases that can go undetected by suppliers’ “soft” credit or identity checks.

To effectively identify and avoid succumbing to fraudulent activities, CTMfile encourages endorsers of BNPL to equip themselves with defense mechanisms that can confirm the validity of transactions instantaneously during the credit application process. By adding layers to the verification process and using a mix of physical and digital characteristics to verify someone’s identity, suppliers can substantially reduce risk of fraud. Carrying out fraud verification on the front-end enables merchants to stop point-of-sale scams and chargebacks ?before they happen.

In today’s economy, digital fraud is on the rise and only expected to worsen. Since March 2020, Bot attacks have risen 41% and will continue to evolve as time goes on. This, along with the ever changing demands from buyers for more flexible payment methods, means suppliers must take precautionary measures now by installing defense systems into their existing processes to ensure protection and safety for both their business and their customers.

To learn more about what CTMfile recommends for staying ahead of Buy Now, Pay Later fraudsters, check out their full article here.

91% of CFOs Say Digital Business Payments Makes Finance Operations More Efficient

Our last article from November is actually a continuation of the first and delves further into some of PYMNTS' specific research findings.

According to the survey data collected, an overwhelming majority of CFOs said accelerating modernization efforts via payments digitization makes back-office operations more efficient. In fact, 91% of finance executives surveyed said their efforts to improve the back-office have led to healthier balance sheets. And when you look more closely at the factors that these finance executives believe are very or extremely important to maintaining healthy balance sheets, you can understand why: accounts receivable/accounts payable (95.5%), asset investment (90.3%), sources of working capital (52.5%). The accounts receivable/payable functions are so important to maintaining healthy balance sheets, it makes sense to see finance executives making concerted efforts to digitize them and the entire back-office.

The results of PYMNTS' survey demonstrates strong recognition from finance leaders that digitizing workflows and other processes leads to wide scale improvements in business operations, with more optimal working capital and cash flow being chief among them (45%). Other top reasons CFOs chose to fast-track their digitization efforts include greater integration (41%), increased automation (40%), and an enhanced ability to attract and retain customers (36%). Beyond this, these executives also noted cost reductions (62.1%) and more robust data security (60.7%) as key by-products of investing in digitization.

To read up on all of the insights gleaned from PYMNTS’ research, read the full article here.

That’s it for this edition of our Weekend Digest. We hope you’ve enjoyed reading and are able to take some valuable learnings away from the stories shared. Make sure to follow our LinkedIn page and other social handles to stay connected with us and all the things we’ve got planned for the remainder of this year and in 2022!