When it comes to receiving B2B payments, fintech investments in the latest technology look like the best way to resolve the challenges that SMEs are facing today in the marketplace. Although the small and medium-size business sector has been neglected until relatively recently, the latest innovations have been designed to target areas, such as lending to small businesses, procurement, online e-commerce, invoice financing, and B2B payments. These are all key elements of the small business world.
B2B Arena The Focus For Fintech Developments In 2017
B2B payments fintech developments have been a high priority for many investors since last year. In 2017, investments worth $8.7 billion were made globally into fintech projects. In Europe, a larger proportion than ever before of financial tech investments have been focused on the B2B arena, with $948 million having been attracted to projects over just the first nine months of the year – 28 percent more than 2016’s entire total.
Several fintech developments are harnessing the power of AI and block-chain in an attempt to streamline processes and reduce costs for businesses. And, in the United States, investors have placed a strong emphasis on the possibilities AI presents with regard to automating the processes of reporting and regulatory compliance.
Invoice Financing And B2B Payments
One of the primary reasons more investment is now being channeled into B2B projects is simply because, usually, B2B payments are part of a more complex business process. Manual effort is often required for these processes because SMEs are unable to afford costly ERP software to automate. There is, therefore, plenty of opportunity in reducing and accelerating the cost associated with B2B payment processing for small and mid-sized businesses through automation. Both domestic and cross-border B2B payments are the subject of the latest focus, with accounts receivable and payable functions now being automated, as well as invoice financing.
Reducing Late Payments
Many companies have begun to work on systems for invoice financing, which have been designed to reduce the number of late payments received – an increasing issue for SMEs. One developer, for example, is working on technology that analyzes corporate buyers’ received invoices and scores them depending on how likely they are to be paid. Financial institutions are then provided with this score. They then pay the invoices that score highly in exchange for a cut. This company is aiming to slash buyers’ transaction costs while improving suppliers’ working capital and providing safe assets for firms providing financial services.
B2B Online Procurement Of Services And Goods
Several companies are also working to cut costs when it comes to acquiring services and goods through building regional and global online marketplaces. Cloud-based platforms, which connect sellers and buyers, will enable buyers to post their requirements and then receive relevant bids from potential suppliers. It is hoped this will not only support the process of procurement and bidding but will also supply project management tools, as well as encourage better collaboration with those suppliers who win contracts.
Lending To SMEs
Fintechs that are addressing the lending needs of SMEs are also attracting plenty of investment around the world. Several companies are working on making investments easier and faster by enabling SMEs to apply through mobile devices, as well as through analytical software, to assess their creditworthiness by considering numerous data sources.
B2B payments fintech is certainly attracting plenty of investment these days. This is a trend that looks set to continue, with fintech also being leveraged by established firms providing financial services to widen their service offerings. BillingTree’s B2B payment systems harness the latest technology to streamline and facilitate convenient and simplified merchant services to help the small and mid-sized business succeed in today’s marketplace.