Why B2B Payments Need a "BizPal": An International Perspective
Businesses and government departments worldwide are trying to streamline their payment processes, giving them more control, flexibility and speed. A solution modeled on consumer payments provider PayPal, but tailored to the needs of business users, might be the answer. Des Cahill, Managing Director of First Data Commercial Services, discusses.
Global commercial spending grew by almost 11 percent between 2006 and 2007, a clear sign of the expanded opportunities for vendors at all levels to join the ranks of global suppliers in an increasingly diverse and accessible buyer market.
While globalization has fueled the availability and distribution of goods and services like never before, support and administration systems in most corporations have not kept pace. In particular, the choice of payment method for business-to-business (B2B) transactions lacks innovation and is rooted in legacy technology. Paper-based payments, such as checks, make up a significant proportion of this legacy. For example, Forte Consulting Group estimates that 75 percent of B2B non-cash payments in the United States are still checks.
By contrast, consumer payments are rapidly migrating from cash and checks to electronic payments. In several European countries, electronic payments make up the majority of all consumer transactions. Meanwhile, when online, we more frequently use PayPal or similar services to make secure anonymous payments. What is clearly needed is a similar ubiquitous payment method for B2B transactions, a sort of “BizPal” for B2B.