Business interrupted: How the pandemic is still affecting the payments industry

Throughout this year there will be many articles discussing how the pandemic changed not only our personal lives, but our professional lives as well. This is especially true of the payments industry where customers were reluctant at the start of the pandemic to embrace electronic transactions but have shown a marked increase in using contactless and mobile payments for their banking transactions.

To provide customers with those experiences, banks have been busy innovating their branches by adding technology and helping employees expand their skill sets.

ATM operators, for example, are finding ways to deliver cash and other vital services to customers while mitigating risk.

"In fact, cardholders are making cash withdrawals at contactless ATMs without ever inserting a payment card," said Mark Aldred, head of international sales for Auriga. "ATMs are being equipped with NFC and QR code readers and the interest in these areas continues to increase."

Josh Cyphers, the president of Nvoicepay, an AP payments automation company, agreed saying that up until COVID-19, applications like cloud-based software was nice to have, but not a must-have for business payments.

"I've never in my finance career seen an AP team that was completely remote," he said during an interview with ATM Marketplace. "With everyone in the office, mobility just wasn't a concern."

Now that AP teams have been out of the office, however, every industry is looking for payment solutions that allow them to work remotely as much as possible.

"Paper checks still reign supreme in B2B payments, but COVID-19 has created a compelling event that's pushing companies toward fully automating payments," said Cyphers, who answered the following questions about the future of payments.

Q: Are companies transforming the way they pay?
A: Companies are turning to cloud-based software which enables accounts payable departments to automate much of the work they've previously had to do manually. That includes the handling of paper checks, but also a lot of the work that goes into electronic payments, as they've historically been done through banks.

For example, if you want to make ACH payments, you have to pick up the phone or send out emails, collect suppliers' banking information and often manually key everything into a system.

For traditional card payments, businesses have had to contact individual suppliers to find out which ones will take card payments and then store their details to key into supplier portals later.

There's a surprising amount of manual work that has to be done to get the funds to move electronically through the banking system, particularly when businesses decide to do that work in-house.

Q: What are the benefits/challenges of companies transforming the way they pay?
A: Cloud-based solution allows accounts payable professionals to make payments anytime, anywhere. It's enabling payment automation providers to transform their disjointed processes — with all the manual touchpoints — into a single automated workflow.

The cloud also makes implementation very fast and easy, so automating payments is something that an organization can now accomplish in a matter of weeks. The challenge often is the change itself. Most times, employees are comfortable with learning a process and sticking to it, no matter whether a faster solution is available. It can be difficult to convince them to move away from old, paper payment models.

That said, once all they're able to work with the software and familiarize themselves with the process, the process becomes less daunting. Many of our own customers have gotten up and running after only an hour or two of training, with the knowledge that our support team is available to answer additional questions as they arise.

Q: What has been the greatest challenges for the payments industry due to the pandemic?
A: Now that accounts payable departments are working remotely, companies are trying to minimize necessary trips to the office, or to each other's homes for check-signing purposes. Suppliers are asking to be paid electronically because they get the money faster and they don't have to go to the bank.

The other challenge is an extreme focus on managing cash. Given the economic environment we're in, a lot of companies are looking for ways to conserve cash. They're looking at the timing of payments; extending payment terms to suppliers or delaying payments. With an automated solution, payment approvals and workflow move online, and visibility into every payment becomes available as they move through the system. This offers precision control over cash flow.

Q: What are payments industries doing right?
A: Like every other sector of business, the payments industry was forced to shift gears and find a more remote and efficient way to operate — and many businesses are opting into payment automation to accomplish this goal. Once the switch is made from check payments, it becomes clear that the advantages associated with cloud-based software (remote payment approval capabilities, stronger risk mitigation, and enhanced control and visibility) are impactful and become the mainstay of payment activity moving forward.

Q : What do you see as the future of the payments industry?
A:B2B payments are about ten times as big as consumer payments, yet adoption of cloud-based solutions is still in the single digits. Given the size of the market, the adoption of mobile payments by businesses is and will be a big trend in and of itself moving forward. These changes have a huge impact on how we live our lives and, overall, it has really sped up commerce and increased the options available to businesses.

The mobile payment experience is becoming a global phenomenon, and I think it will fuel all kinds of innovation and change.