It is evident that digital acceleration is creating a new payments paradigm as corporate non-cash payments are forecasted to reach 200B transactions by 2025. Shifting global payments priorities are placing new pressures on payments operations.
Payments executives are facing increasing expectations to transition their departments from cost centers to creators of enterprise value. What strategic considerations can help businesses meet digital economy demands and maximise end-to-end payments efficiency?
Digital acceleration drives a shift in strategic payments priorities, writes Andrew Burlison, head of payments at LexisNexis Risk Solutions. Burlison is responsible for the Payment Efficiency portfolio at LexisNexis® Risk Solutions. He ensures that the solutions it provides are relevant and effective at ensuring that banks and businesses have the information they need to execute payments, quickly and safely.
LexisNexis Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe.
Explore global corporate payments trends from this recent study.
A recent study from LexisNexis Risk Solutions and Capgemini Invent explores the Evolution of Corporate Payments. The global study outlines current corporate payments trends and highlights how businesses are navigating digital payments challenges and setting strategic priorities.
The study summarises insights from 400 managers and executives working with corporate payments. The 2022 research provides a global viewpoint garnered from 42 per cent of respondents representing EMEA, 34 per cent representing APAC and 24 per cent from North America.
This article details key research insights and considerations for refining your strategy to reflect today’s new payments paradigm.
Significant corporate digital payments growth starts delivering measurable advantages
Corporate non-cash payments represented around 133 billion transactions in 2021, totaling 13 per cent of all non-cash payments. The impacts of digital acceleration and efforts to standardise international payments are contributing to rapid adoption of corporate digital payments.
Study findings illustrate the prevalence of account-to-account payments (A2A) as a preferred corporate choice:
- 54 per cent of both accounts payables and accounts receivables are handled via A2A solutions globally
- North America and Europe each account for 1/3 of worldwide corporate non-cash payments volume
- APAC represents 19 per cent of worldwide corporate non-cash payments volume
While A2A payments market maturity varies by region and country, multinational businesses utilising A2A payments are realising clear performance advantages. Higher levels of automation and standardisation help improve end-to-end payments efficiency. The top three A2A payments benefits cited by respondents include:
- 76 per cent higher security
- 64 per cent lower failure rate
- 50 per cent reduced costs
Corporations are focusing on optimising the efficiency gains A2A payments deliver by effectively managing some of the lingering operational challenges impacting payments costs and complexity. Study respondents point to three top A2A payments issues:
- 73 per cent lack or cross-border interoperability
- 73 per cent lack of interoperability with clients
- 52 per cent data verification
Businesses are addressing these ongoing challenges by adding more advanced middleware solutions and automatic data verification tools into payments workflows and concentrating on Improving standardisation among vendors and clients.
Performance expectations move beyond effective payments execution
Digital acceleration is influencing expectations for customer and supplier payments experiences that prioritise speed, accuracy and agility at every touchpoint. Increased levels of automation are enabling payment managers to focus more on payment strategy and business development and the strategic priorities emerging from our study reflect this shift:
- 60 per cent of corporates rate digital transformation as a key priority going forward
Top priorities for payments managers in 2022:
- 72 per cent defining payment strategy
- 46 per cent improving overall business performance
- 40 per cent optimising costs
Thierry Morin, head of payments, Capgemini Invent, reflects on the factors driving these developments. He says: “While corporates have historically been primarily searching for simplicity and cost efficiency, they are now looking at more advanced and valued-added payment solutions, fostered by the rapid development of new technologies and the necessity to go fully digital during the pandemic.”
Morin outlines how this expanded focus is defining strategic payments priorities for 2022 and beyond.
“Best-in-class corporates are already fully embracing new digital payment ecosystems leveraging cloud payment platforms, real-time data management and end-to-end integration, increasing the gap with the rest of the market. In that context, the race is on in 2022 for payment executives to prioritise the right investments and set up a forward-looking payments platform, addressing the on-going market developments and evolving vendor/client expectations.”
Payments automation is opening opportunities to optimise end-to-end payments efficiency, improve payments experiences for customers and suppliers and capture greater cost and operational synergies. Our study outlines how multinational businesses are expanding payments priorities to position their payments operations to contribute more value at the enterprise level.
Explore the full study for insights on how an optimised payments workflow is helping global organisations keep pace with digital acceleration challenges and capture competitive advantage.