Asia Paytech Spotlight

The Untapped Opportunity of B2B Paytech: Looking To The Future

The B2B payments market has been estimated to be bigger than the consumer market with both larger and more frequent payments. It is an area ripe for disruption.

According to Joshua Bao, co-founder of SUNRATE, a digital cross-border payments platform based in Asia, the B2B payments space has huge potential and yet it remains largely untapped.

Bao, who has more than 15 years of experience in the world of financial technology, began his career at global firm Citibank where he directed foreign exchange and investment transitions across APAC regions.

Having witnessed the payment issues SMEs experienced first-hand he and the team were inspired to create SUNRATE. As well as helping companies access fast, cost-effective and safe cross-border transactions the business also partners with leading banks and institutions to pioneer innovation within financial technology.

Here Bao looks to the future of payment technology and the potential it has to help businesses thrive.

Joshua Bao
Joshua Bao, co-founder of SUNRATE

Over the last decade we’ve witnessed the rapid growth of B2C payment technology with the invention of mobile banking, mobile wallets and new point of sale providers.

Inspired by changing consumer perceptions and requirements, people now seek immediate, personalised updates on their payments.

However, while there have been huge strides within B2C paytech, many businesses still rely on face-to-face interactions and a physical paper trail.

Yet is this all about to change?

Disruption is digital

Digitisation has to be the first step on the road to a modernised B2B payments system. Paper payments are slow to process, they rely on physical human interaction and they’re not easy to track nor analyse.

One key benefit of digitisation is the opportunity for live communications and real-time feedback. Already a common occurrence for consumers it will soon become the norm for businesses. Modern payments systems deliver easy to access, information-rich transactional details where both the sender and receiver are notified. For businesses this new transparency will enable them to better manage payments processes and have visibility of their funds and forecasting. This in turn enables them to manage their risk and plan accordingly. Ultimately digital payments provide an additional level of clarity over the processing.

Creating data through digitisation

A further advantage of paytech is the potential when it comes to documentation. When making payments, especially in emerging countries, reams of trade documentation are required in order to process them. Payment SaaS helps convert offline documentation to online so that it is easily and quickly accessible when needed. This helps businesses manage their documents and track their payment behaviour.

As any business leader will know, through analysing data it’s possible to gather insights and improve on previous activity. This is true for digital payments. In the past payment fees were blurred or buried within the small print but with digital payments they are now transparent. This gives businesses the ability to track and analyse all of their payments so that they can make informed decisions on how they develop their infrastructure, technology and approach.

Digitising cross border B2B payments

One area of payments that is growing fast is cross border B2B trade, with global cross-border B2B payment flows expected to reach $150trillion in 2022. Historically cross border payments have fallen within the remit of traditional banks who, while functional, were relatively slow in innovation due to their large-scale and complex system. This has meant that businesses have faced a lack of transparency with both pricing and FX fluctuations, high transaction costs especially with more exotic currencies, and long settlement periods. As a result, in recent years new players have entered the market to improve the system and offer competitive solutions.

Paytech has the potential to create new revenue streams for SMEs who are currently faced with slow and expensive cross-border transactions. For example, at SUNRATE we help small businesses get access to lower transaction costs through leveraging both the international and local settlement networks. In this way the fund arrival time is reduced from a few days to same day (T+0). Instead of a prolonged settlement period, clients are able to pay their out-of-country customers and vendors way faster, with little to no friction points. This was previously only a benefit for the large businesses who were transacting large volumes of payments.

When it comes to FX rates, the risk lies in the timing of the transaction – businesses cannot commit to a potential rate, they must commit to an actual rate in order to understand the amount that they’re making. Consequently, we lock-in FX rates before the payment is made so that there is no risk that the price can go up or down enabling businesses to make calculated decisions and avoid FX market fluctuations.

Flexible card solutions

When discussing B2B payment technology and cross-border trade it is important to mention the potential impact of card schemes, as these can offer businesses great flexibility. Cards now support multiple currencies and when making cross-border trades these benefits can be passed straight on to the customer. This allows businesses to focus on their customers without worrying about additional rates or FX fluctuations. Furthermore, there are the inherent practicalities of cards which enable businesses to make instant payments with real-time reconciliation. This in turn minimises transaction disputes before they arise and improves the customer relationship.

The integration of fintechs

Finally, it’s important to look at how the new payment technology developed by fintechs can be made accessible to a wide range of businesses. Recently we’ve seen a flurry of partnerships between traditional financial institutions and fintechs and it’s becoming clear that they are no longer separate entities but two interchangeable sides of the same coin. There are now more than 26,000 fintechs in the world and they have become an integral part of the payments system due to their ability both to rapidly develop technology and offer bespoke solutions.

For example, SUNRATE partnered with Standard Chartered Bank China to launch a new initiative ‘Hui e Da’ – a one-stop digital cross-border payment solution. This combined SUNRATE’s innovative technology with StanChart’s global financial network to build a product that enables its clients, importers, to quickly execute FX transactions and digitally manage their business transactions online, helping them save up to 75 per cent on their payment costs. This was very much a bespoke solution, built for its business customers working both offline and online who needed reliable rates and a simple experience.

A final word

Taking on new technology can be daunting. For each business many departments from procurement to billing, accounts receivable and accounts payable will all be involved in payments. While it’s understandable they will have concerns about disrupting the workflow, ultimately the benefits will outweigh the costs. Payment technology has the potential to transform the workflow of companies, to enable businesses to gather data on their transactions and have visibility of their processes. It’s time for banks and fintechs to put their heads together, to ease the payments burden on businesses, and help them smoothly transition to the latest technology. This is how we’ll see our global economy flourish.


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