Real-time payments aren’t only getting off the ground in more markets across the globe, but they’re also gaining traction in B2B payments — an ecosystem once assumed to be off-limits for instant transaction functionality.
The previous line of thinking had been that businesses don’t want real-time payments for their supplier payment needs, considering that many organizations strategically time their payments and delay initiating a transaction until the opportune moment.
But as real-time infrastructure evolves, the B2B ecosystem is discovering that the capability can indeed deliver immense value to businesses, including in the context of B2B transactions.
In Australia, the New Payment Platform (NPP) is the market’s latest national initiative to usher in the next era of payments modernization, offering real-time account-to-account (A2A) capabilities. Now, B2B FinTechs are beginning to explore its value for small business end-users. Australia-based Azupay is among them, and its Chief Executive Officer John Murphy recently told PYMNTS about some of real-time’s core value propositions for the SMB community and the B2B payments ecosystem
The NPP Value Prop
For small and medium-sized businesses, getting paid faster can mean the difference between healthy cash flow and missed payroll or bill payments. As such, it’s not a stretch to imagine the potential for a national payment rail like NPP to support small businesses’ financial needs.
It’s on that basis that Azupay recently announced an integration with Xero, PayID powered by Azupay, which allows small-business Xero users to issue invoices and allow customers to pay them via NPP. This, according to Murphy, “improves their cash flow at a time when they need it most.”
But it’s not just the speed at which SMBs receive payment that delivers value to the business end-user. Increasingly, real-time payment solutions are highlighting other value propositions that can be particularly impactful for businesses in the back office.
NPP, for instance, is able to support straight-through reconciliation, made possible by Azupay’s tokenization of the payment and PayID technology. Each PayID is registered for a particular invoice payment, “so no remittance information is needed,” noted Murphy. Not only does this provide for enhanced security and mitigate the risk of errors, but it also streamlines back-office accounts receivable functions like reconciliation.
It’s a new take on the more recent emphasis on real-time payment networks’ B2B payments opportunity. While many of these newer rails are able to transmit a higher volume of robust remittance data, overlaying technology on top of a rail like NPP means remittance data isn’t required in the first place.
“By removing the need for receipt numbers, biller codes or other identifiers, we eliminate any likelihood of payment errors, while also ensuring that the payment data matches the corresponding record in the Xero platform,” Murphy stated, adding that SMBs can make use of transaction data in a variety of other ways. “The applications for this are extensive.”
New Rails Meed Old(ish) Tech
The concept of overlaying new technology on legacy payment rails has helped elevate payment networks’ ability to meet elevating customer expectations, whether that’s speed, movement of data, security or otherwise.
But in Australia, Azupay is putting a new spin on this tactic. In addition to integrating its technology with NPP, Murphy said the company also sees an opportunity in overlaying a legacy technology on the new payment rail: QR codes.
“Until recently, awareness and adoption of QR in Australia was a long way behind other countries in our region,” he said. “However, because of the COVID check-in policies mandated by our state governments, this has completely changed in a short period of time.”
With QR code adoption reaching ubiquity in the country, it made sense to wield this solution to support payments on invoices sent via SMBs. Azupay integrates a QR code on invoices, allowing end customers to initiate that NPP transaction more seamlessly.
While this has obvious ramifications for consumers looking for an efficient and familiar way to pay bills from small businesses, there is a growing opportunity to embrace these technologies — real-time payments, QR codes and PayID — for B2B transactions.
Those opportunities will expand as Australia augments NPP, with Murphy pointing to the nation’s plans to launch “PayTo” services within NPP next year, an effort that he said will greatly improve upon Australia’s existing direct debit system and will support the growth of the subscription economy.
As an always-on payment rail, NPP will continue to explore new avenues for adoption as it evolves and gains greater traction. And, according to Murphy, B2B payments will play an important role in that effort.
“B2B payments is certainly an important area for us,” he said. “The way businesses pay each other hasn’t really changed for decades. The New Payments Platform infrastructure, coupled with Azupay’s unique solution, has the capacity to completely modernize B2B payments in an always-on world.”