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The Impact of AI on B2B Payments

April 1, 2022


Evolution of AI in B2B payments

AI has proven its worth in augmenting various operations across different functions and industries. Similarly, Robotic Process Automation (RPA) driven by AI shows enormous potential in speeding up the cumbersome tasks involved in B2B payments.

The market for B2B payments was estimated to be worth approximately $903.50 billion in 2021 and is anticipated to be worth $1,618.15 billion by 2028. We have all witnessed the surge in digital contactless B2C payments since the start of the pandemic. B2B companies are also dealing with the revolutionary changes brought on by a new generation of buyers in a digital-first world. Due to the permanent changes brought about by COVID-19, B2B buyers who need a variety of payment options, now expect the same ease and convenience that they have grown accustomed to in the B2C sphere.

Buyers of all ages have realized that digital-first B2B experiences can mimic the B2C transactions that they are now all too familiar with. B2B buyers are increasingly seeking more self-service options as well as greater control over financing.

While B2B payments have a lot of catching up to do thanks to the different levels of complexity in authorizations and the numerous payment terms involved — B2B companies are now speeding up this process, lowering costs, and reducing errors by using Robotic Process Automation (RPA).

The Evolution of AI and B2B Payments

Until a few years back, payments included manual procedures and legacy systems, which significantly strained businesses. Whereas now, AI is deeply embedded in the payment environment. Traditional banking, lending, and financial institutions have increased their active investment in artificial intelligence and integrated it into their technological infrastructure. As a matter of fact, at the current growth rate, global investment in AI by the FinTech market will reach $22.60 billion by 2025, with a CAGR of 23.37%.

By leveraging information management, RPA driven by AI can be used to enhance accounting efficiencies. AI has become non-invasive to the point where only minimal convergence with existing system infrastructure is required. This, in essence, increases efficiency by eliminating the human effort needed to boost labor-intensive activities.

B2B transactions typically consist of several steps, including sending a purchase order, managing invoices, and negotiating pricing and payment terms. This necessitates a lot of back and forth between various departments such as billing, accounts receivable, and accounts payable.

It’s a cumbersome procedure, which is further slowed down by monolithic, standalone legacy systems. Many of the tasks that need to be performed in the B2B payment process are quite repetitive. These tasks can be automated with great precision by utilizing AI-powered B2B payment solutions.

Many AI-backed B2B payment solution providers also incorporate value-added services into their products. This includes working capital, letters of credit, export insurance, credit protection, and logistics — thus providing businesses with offerings they would need beyond payment solutions.

How can AI simplify B2B payments?

In an increasingly digital world, firms must streamline B2B payment processes to meet their customers’ needs better. AI in B2B payments can help automate payment processes to save time and eliminate human errors. Thus, speeding up the process and keeping both parties satisfied.

Here are some of the key ways in which leveraging AI can help organizations simplify B2B payments:

Automating accounts payable

Automation enables businesses to eliminate several unnecessary elements, significantly reducing the time and costs associated with payment processing and handling. Standardizing financial transactions with automation software also helps to reduce the risk of operator error and keep payments under control.

Improving credit access

AI-enabled credit scoring allows businesses to be evaluated for far less than they would have cost if done manually. Furthermore, AI tools can eliminate bias and use both current and historical data to make credit decisions when traditional financial information is lacking.

Fraud detection and prevention:

AI and machine learning are now enabling not only fraud detection but also fraud prevention. Many fraud prevention tools already use artificial intelligence to encrypt or safeguard client and supplier information. More advanced systems are now incorporating machine learning to aid in the identification and assessment of potential risk factors and the detection of any suspicious behavior or vulnerabilities that would otherwise go undetected by humans.

The growing role of AI in B2B payments

AI has enabled key FinTech and payments ecosystem players to avoid the risks associated with B2B payment processes seamlessly. It can eliminate repetitive processes that stifle business development and free up resources and money for companies to focus on more important issues. As the B2B payment space continues to grow and evolve, this will lead to increased investor confidence in B2B FinTech entities. For now, we can be certain of one thing — the future of AI in payments sure looks promising.

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