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How today’s challenges are bringing tomorrow’s solutions for business payments

When it comes to business payments, questions abound—from how to solve everyday problems to predicting the next innovation in the space. Uma Wilson, executive vice president and director of bank product management at UMB Bank, explored the industry’s most pressing issues in a recent roundtable with other payables industry experts hosted by Bottomline.






I recently had the opportunity to join Bottomline’s Business Payments Roundtable, where we discussed the business payments landscape. While you can catch Global Finance’srecap of the discussion, below are some key takeaways highlighting the challenges, solutions and future innovations of business payments.

Challenges facing business payments

The amount of soft costs that go into running vendor payments presents a significant challenge; companies should always be looking for ways to make that process less costly and more efficient. Small businesses often struggle with resources to manage payables, while larger companies face difficulties with red tape and inefficiencies. These obstacles can weigh on business operations and can make a change feel overwhelming.

Companies also have concerns about the security of new payments systems, and how customers and vendors will feel about new operational structures. However, through improved technology and education, payments decision-makers are increasingly realizing the value of digitized business payments.

Opportunities presented by business payments solutions

Payable automation offers solutions for companies of all sizes, with opportunities to work smarter in the following ways:

  • Ease of payment and use
  • Cost savings by eliminating paper checks
  • Rebates for customers, which in turn are revenue opportunities
  • The ability to push payables to cards

Through digitizing and automating the payment process, companies’ accounts payable departments can streamline payments to vendors without individually cutting, signing and mailing paper checks. This eliminates operating expenses by reducing check stock costs, while also allowing vendors to receive their payments more quickly. Furthermore, payable automation helps mitigate fraud attempts more efficiently.

Additionally, banks and payment networks are increasingly partnering to achieve more streamlined payables systems. For example, UMB has partnered with both Bottomline and Fraedom, a subsidiary of Visa, to help our commercial customers securely automate payments while enhancing their user experience with greater program oversight.

Future business payments innovations

Education and continued technology advancements focused on speed and efficiency will be the ultimate drivers of a “digital first” payment transformation.

Emerging technologies are advancing integrated payables solutions, which allow companies to streamline their payment processes by consolidating all expenditures into a single file. Integrated payables typically accommodate payments via check, ACH, wire transfer and virtual card without requiring changes to existing AP processes. By utilizing this payment automation, companies can reduce fraud and overhead, take advantage of incentives such as rebate programs and discounted vendor pricing, as well as receive detailed reporting on payment and remittance details.

Virtual accounts are another innovation in the industry. Managed just like their traditional counterparts, these cards tend to have larger credit limits thanks to significantly reduced risk of fraud, due to the absence of a physical card. Virtual accounts are an efficient way to handle recurring payments or one-time vendor payments.

When it comes to regulations, the most significant development is the Fed’s consideration of operating a real-time gross settlement system that would promote faster, more efficient, and more secure U.S. payments. UMB agrees that banks should work together, and with the Fed, to accomplish the goals of increasing speed and user experience—which we demonstrated our commitment to through our recent partnerships.

While business payments offer their fair share of challenges, the exciting news is that banks and payment networks are partnering to bring new solutions and innovations to life to deliver streamlined processes and ultimately financial benefits for companies of all sizes.

Interested in learning more about UMB Business Banking Solutions? See what we mean when we say, “Grow with Confidence.”
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When you click links marked with the “‡” symbol, you will leave UMB’s Web site and go to Web sites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other Web sites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.