We still have to discover what are the lasting effects of the COVID-19 pandemic on healthcare, societies, and the economy. However, there is already one certainty: the global pandemic has fast-forwarded the digital transformation in almost every sector all over the world. The digitalisation of B2B payments is one of the trends that have been boosted by the health crisis. Below are the trends that will define how business-to-business payments will evolve in the future.
Many of us are waiting for things to go back to “normal”. Attending concerts, visiting friends and hassle-free travel are among those things. However, there are some effects that we should embrace and develop even further. The accessibility of online services, education, and modernised payment solutions are the benefits of the pandemic aftermath. Let’s see how ventures across the globe have adapted to social distancing and other restrictions thanks to digital transformation.
B2B Digital Payments & Pandemics
The global B2B digital payments market size is huge and is roughly $130 trillion. The digital payments market has been growing at roughly 5% a year, however, the global pandemic has accelerated the trend. Around 82% of businesses in North America have changed the way they send and receive money during the pandemics. Moreover, as many have adopted the new payment methods they saw the real benefits and are likely to embrace them in the future.
The benefits of digital B2B payments are endless. Electronic payments are fast, cost-efficient, sustainable, and transparent. The businesses that offer their clients omni-channel payment options are regarded as modern and customer-centric. Furthermore, the younger generations as millennials and Gen Z are more likely to prefer digital payment options over cash and physical invoices. Now, that the pandemic has shown that it is easy to integrate electronic payment methods, the expectations of customers of all generational cohorts have changed. Moreover, electronic payments are now accepted not only by the more traditional sectors as retail, but others like educations, law, medicine, and etc.
Post pandemic e-commerce is booming
We all did it- shopped online during the social distancing rules. So, it is not a surprise, that global online sales have jumped to $26 trillion according to UNCTAD data. E-commerce is now making almost a fifth of the total sales, up from 16% the year before. More importantly, in the US, the biggest online sales country, B2B sales make up 87% of total e-commerce value. The second and third places are taken by Japan and China respectively, where the business-business sales’ share is 97% and 41% respectively.
Furthermore, the business online sales are quite large. According to a McKinsey report, 70% of the B2B sales decision-makers are ready to spend $50,000 to make a purchase completely online. Whereas almost a third are looking to spend $500,000. The golden age of e-commerce is just getting started. The latest August 2021 survey showed that 91% of e-commerce CMOs expect their revenue to increase in the next 12 months.
The numbers speak for themselves- businesses embrace online shopping. Moreover, online shopping is here to stay, because it is more convenient. According to a survey, 75% of consumers tried new shopping methods, and 73% of them intend to continue. The majority of the sales are happening through the website. So, it is important to integrate electronic payment options for your customers. According to the Ernst Young survey, 60% of all respondents said that introduction of electronic payments was the most meaningful change they have adopted during the pandemic.
Automate Accounts Receivable (AR)
Now, that the businesses have proved that digital sales are here to stay, they must prepare for the technological innovations. Among important tasks is to implement modern solutions in warehouse management, sales, and logistics. However, one of the most accessible and easy-to-implement digital solutions in AR automation. The manual process of sending out the physical invoices is not hygienic, not sustainable, time-consuming, and is likely to go missing in the postage. Even electronic invoices are still prone to errors, especially as the volume of online sales is growing. As the COVID-19pandemic started, more than a third of small and medium businesses surveyed by Mastercard started to look into automating their accounts receivable citing more transparency, security, and faster collections as the main reasons.
Kolleno offers businesses from various industries AR automation software. Our cloud-based solution is compatible with all major accounting software and will significantly reduce your workload. The customers will receive friendly reminders using the most appropriate tone-of-voice and will get easy-to-follow payment instructions. This will not only decrease your days sales outstanding (DSO) but also will keep your customers happy.