With the release of Apple Pay and other mobile payment systems, mobile payments for consumer-facing businesses have been the talk of the town. Whole Foods, Walgreens, Staples, Nike, even Macy's are using them. But there's a whole sector these articles aren't talking about: business-to-business.
Here are four reasons why B2B mobile payments are a huge deal.
1. Real-time payments
When a business provides a service, getting paid can take days, weeks or even months. The Georgia Tech Financial Analysis Lab found that average days in payables among public companies rose from 35 days in 2009 to 46 in 2014. Cash gaps aren't just a headache: they require additional cash kept on hand, or worse, financing, which eats into business profits.
Fundbox, a San Francisco startup that offers loans to B2B companies that struggle with a cash gap, estimated that the sector is a $72 million marketplace. While just an estimate, the sheer size of it shows that cash gaps are too common for many businesses.
B2B mobile payments can often be the solution to these issues for small businesses. Whether the customer prefers to use cash, check, or credit card, all can easily be accepted with many mobile payment solutions and payment processors. Businesses no longer have to wait days for a paper check to arrive in the mail, or hope that their invoice doesn't get lost.
In addition, generating an invoice on site means less work for administrative staff. Employees no longer have to go through crumbled carbon copies to determine what work was or wasn't done. Instead of taking days to send out a paper or electronic to a customer, it can be automatically generated as soon as the work is done.
Not only do businesses reduce or eliminate their cash gap, but also reduce the workload for their administrative employees. Going mobile allows you to get more done and enjoy more money in the bank.
2. Customers prefer electronic payments
A 2013 AFP survey shows the decline of paper payment. In 2004, organizations made 81% of their B2B payments by check. By 2013, that number had dropped to just 50%. As we become increasingly based online and store data in the cloud, businesses are moving to digital forms of payment, too, often via mobile apps.
Working with different businesses, B2B mobile payments can allow you to work with companies in their comfort zone. Mobile payments allow your business to be flexible in accepting various methods of payment via mobile devices. Many providers, including PayPal and Square, allow you to accept cash, credit cards, even checks.
3. Digital and clear records
Small businesses need digital records these days. Email, not letters, are the way we communicate and share information in 2015. The same AFP survey found that email is the most common method used in sending and receiving remittance information. Paper receipts are easy to lose or damage and require additional work to integrate into databases. A cash receipt app replaces reduces all the potential loss and damage that comes with paper.
Mobile payments make it easy to share information in the way businesses want to receive it: via email. Going to a mobile payment system allows businesses to quickly send a receipt of payment to the customer's inbox. No more messy carbon copy receipt, just clear text showing proof of purchase such as our cash receipt form app.
Your customers will easily be able to integrate that information into their systems seamlessly. Even if they lose a copy of the receipt, it's easy to send a quick email with the receipt attached, proving that a credit card payment or other form of payment occurred.
4. Mobile payments are safer
While stories about credit card security breaches of some major retailers have flooded the news, they aren't the only ones thieves are trying to hack. AFP's 2014 study shows that 60% of organizations were exposed to actual or attempted fraud payments. The format that was most popular? Checks — at a whopping 82%. Credit and debit cards, though on the rise, lagged behind at 43%.
Mobile payment systems are serious about security. Both Square and PayPal offer encrypted card readers for mobile devices. PayPal also provides a robust seller protection program protecting their merchant accounts from fraudulent claims. They also provide additional resources to help businesses recognize and avoid scams.
With additional security around payments, you'll be better able to protect your customers and your business.
Mobile payments aren't going away: They are becoming an increasingly common way for consumers and businesses to pay for goods and services. Real-time payments, electronic records, and additional security are just some of the ways they can strengthen business and help you compete in a crowded market.
Are you ready to go mobile? Discover how real-time payments can transform your business.