Payments Transformation Spark Smarter Ways of Working

Emerging technologies have the potential to transform the treasury and accounts payable and receivables functions. And especially amid the impact of COVID-19, adopting new solutions can help organizations adapt payments to a new reality.

Modern technologies like real-time payments, application programming interfaces (APIs) and process automation enhance payments efficiency and provide organizations with better visibility and control over payments-related functions. As companies embrace remote work and shift their resources to accommodate new ways of working amid the coronavirus crisis, thoughtful payments transformation can create a strong, customized foundation for a more effective approach to treasury management in the future.

New Technologies, New Benefits

B2C and B2B companies alike have been migrating to more digital ways of doing business for years, and the pandemic has accelerated the shift: In a Mastercard study of small businesses across North America, 76% say the pandemic prompted them to become more digital, with 82% changing how their business sends and receives payments—citing speed, security and transparency as key benefits of using new technologies. Among U.S. small and medium businesses at large, only 19% still do not accept digital payments in any form.

Becoming “more digital” can mean many things but sending and making electronic payments (or incorporating them into business continuity plans) is a common first step toward transforming other aspects of the treasury functions. Once electronic payments are in place, it’s easier to imagine the possibilities and benefits of taking digital payments a step further.

Implementing real-time payments (RTP) is one way to realize additional benefits. RTP technologies do more than power immediate payments; they empower businesses to have greater control over when payments files are sent and funds moved electronically—with enhanced visibility into the process using digital tools. Once they embrace RTP and its benefits in control and visibility, companies then have the opportunity to 1) determine how they could use RTP to create competitive differentiation; and 2) pursue and deploy additional technologies that can help them get there.

APIs, for example, enable businesses to work more seamlessly with third-party service providers for payments. Rather than simply transmitting the required information for processing to a payments gateway, APIs integrate with a business’s own systems in such a way that the treasury function can view the conversation around their data—which is ideal for businesses looking to streamline and better understand data flows inside the treasury function.

Streamlining both data flows and processes is key to making the business more efficient. The deployment of robotic process automation (RPA), for example, may precede the implementation of RTP and APIs. This gives organizations an opportunity to assess the heavily manual processes in the treasury function, and identify the right areas for automation to reduce costs and create new efficiencies.

Effective Change Management

Modernizing treasury management with new technologies allows small business owners to customize their approach to payments in a way that meets their needs now—and moving forward. Leaders of small and medium-sized businesses are wise to look to like-size peers—even those in other industries—for high-value examples and recommendations on how to handle transformation, but they shouldn’t expect to achieve any other company’s exact outcomes.

While every organization's starting point is unique, some common needs and goals to consider include:

• Reducing fraud risk
• Saving time on routine processes
• Improving access to payments information
• Adapting for a reduced or remote-first workforce
• Realizing gains in efficiency, cost reduction, or labor shifts

Companies succeed with treasury improvement when they take a holistic approach to the adoption of new solutions, as well as involve stakeholders from across the business in designing and implementing them. Ideally, however, there should be support at the top of the company for embracing transformation. (A full 34 percent of CFOs expect to prioritize digitizing financial operations in 2021).

Including individuals from all levels—C-suite, technical, managerial and staff—in the transformation effort and change management process, from the very beginning, is essential to winning buy-in from all parties affected by the shift to new technologies. Designing the change management plan in such a way that there are concrete, value-adding steps throughout the long-term process helps staff stay engaged by ensuring they see the change (and its benefits) in action.

In this new pandemic reality, adopting new digital solutions in many areas of the business can help streamline and modernize operations for smarter, more efficient ways of working. In payments, new technologies can unlock stronger control and visibility, among other benefits for C-suite and staff. Their best bet for success: Have a vision where you want payments to go, focus on the steps to get there, and find expert partners that can provide valuable consultative help on modernizing treasury management.