5.3 Technology and Trends
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It is in a company’s best interest to make it easy for customers to pay them. Payment methods can easily make or break a transaction and impact customer loyalty. With increasingly competitive environments, companies are continually tasked with improving the customer experience as well as reducing operating costs. Tools that can simultaneously solve both problems are at the top of the accounts payable trends list. According to HighRadius, a finance automation platform, customer convenience, data security, and continued process automation are among the top accounts receivable trends. Let’s dive into some examples that use the latest technology.1
Customer Convenience
Convenience is synonymous with customer experience. Difficulty accessing electronic payment portals or having to pay a convenience fee for online payment—or, even worse, paying over the phone—will further delay customer payment. Mobile-friendly payment websites or apps are becoming a standard expectation, especially for online retailers. The service that establishes the link between customer banking data and the merchant’s bank during online payment transactions. such as PayPal, Stripe, and Adyen can give businesses a cloud-based solution for receiving electronic payments.2
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Customer Data Security
Convenient online transactions have given rise to sprawling customer databases—and, unfortunately, customer data breaches. To protect customer account information, payment gateways have begun using Technology used to replace sensitive payment data (primary account numbers) with a network-generated token.. Similar to virtual credit card numbers, tokenization replaces credit card numbers with a representative string of numbers for added security for online purchases. However, the credit card company is involved in the network tokenization process. In the event the card is stolen, the network token itself doesn’t change because the card company will update the card number behind the token.3
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Automation and Process Optimization
Using accounting software programs to automate email reminders, enable electronic payments, and schedule collections notices benefits both the business and the customer. Time-consuming phone calls and employee follow-up are reduced greatly, allowing employees to focus on other projects. Automated email communications with electronic payment links make it easy for customers to pay without needing to send a check, make a phone call, or log in to another website.
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Buy Now Pay Later (BNPL)
For accounts payable, we discussed the rise of virtual card payments for both Abbreviation for “business to consumer” sales model, in which a business sells products and services directly to the consumer. and Abbreviation for “business to business” sales model in which sales occur between businesses, such as between a wholesaler and retailer. transactions. Buy Now Pay Later is another example of retail PayTech that has extended into other categories. Typically, BNPL gives buyers the ability to make installment payments on fashion or home furnishing purchases, all through an instant loan approval process. Klarna, Sezzle, Afterpay, PayPal After, and Affirm have become familiar BNPL apps in the marketplace.
But is BNPL available for less fashionable purchases? The answer is yes. Ernst & Young published a 2022 report to explore the future of payments, identifying BNPL as an opportunity to evolve toward auto repair, healthcare, legal, and even corporate purchases.4
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And it’s already happening. Sunbit caters to large, essential purchases for in-person services, such as auto repair and healthcare services. For home services, Wisetack offers 3- to 60-month financing plans. They are also a suitable BNPL solution for veterinary, dental, and auto repair purchases. By partnering with easy-to-use BNPL apps, small businesses can reach a larger market of customers in need of higher-ticket essential goods and services.5