Mid-Sized Companies Lead Transition to Digital B2B Payments

NEW YORK, NY (November 5, 2024) – The shift to B2B digital payments is well underway among middle-market companies, but there are even more benefits that mid-sized firms can harvest from online payment processes. This is the top-line conclusion of Digital B2B Payments for Mid-Sized Firms: How to Complete the Job, a new study by Harvard Business Review Analytic Services sponsored by Capital One Commercial Banking.

“The report echoes much of what we’ve been hearing from our customers,” said Phil Beck, Head of Treasury Management at Capital One. “There’s widespread enthusiasm for digital payments, and many middle-market companies are already seeing added efficiencies. At the same time, some companies are hesitating because of concerns about compatibility and lack of supplier acceptance.”

Almost all of the mid-sized companies surveyed have digitized at least some of their transaction streams, implementing electronic funds transfer, automated payments, online payment portals, and virtual cards, among other tools. The survey revealed that roughly half of total payment value has been digitized by about 50 percent of the mid-market companies—and that it is already delivering many hoped-for benefits. Respondents reported lower costs through personnel efficiencies, real-time visibility into incoming invoices and outgoing payments, the ability to better analyze spending, increased transaction processing speed, and convenience for partners, suppliers, and employees.

However, the report notes that there are still obstacles and preconceptions to overcome. At the top of the list are supplier acceptance and compatibility with existing financial systems. Supplier resistance was mentioned by 36 percent of the participants while lack of interoperability was cited by 35 percent.

“These objections are not insurmountable, but it is up to payments providers to take the lead and provide strategic guidance and advice,” said Rajsaday Dutt, Head of Commercial Card Product Strategy at Capital One. He cites Capital One’s practice of standardized file formats when developing digital payments projects to ensure compatibility. Dutt also noted that when providers partner with their customers to develop a sequenced, prioritized supplier acceptance strategy, the proportion of suppliers willing to accept digital payments can rise substantially.

Another important finding of the survey was that concerns about transition costs may be unfounded. Cost was cited by almost a quarter of the participants as the biggest obstacle to deploying B2B digital payments systems faster in their organization. However, the survey revealed that 20 percent of those who had adopted digital payments said the project paid for itself within a year.

Taken as a whole, Digital B2B Payments for Mid-Sized Firms: How to Complete the Job suggests that none of the obstacles to adopting digital payments are insurmountable and that their promise is as compelling as ever.

The results of the study are based on a September 2018 survey of 159 financial professionals from companies with annual revenues between $25.0 million and $1.99 billion. For a copy of the full report and additional information about this study, please clickhere.

Capital One Commercial Banking’s Treasury Management Solutions Group is committed to delivering a

superior client experience, with dedicated teams of consultants and support representatives. We deliver innovative treasury management solutions, including Virtual Vault, Escrow Express, and the Commercial Card Program, which features virtual cards. The group is investing heavily in digital transformation to help to keep clients ahead of the changing digital landscape, while bringing industry-leading capabilities to market.

About Capital One

Capital One Financial Corporation (www.capitalone.com) is a financial holding company whose subsidiaries, which include Capital One, N.A., and Capital One Bank (USA), N.A., had $247.2 billion in deposits and $362.9 billion in total assets as of September 30, 2018. Headquartered in McLean, Virginia, Capital One offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. Capital One, N.A. has branches located primarily in New York, Louisiana, Texas, Maryland, Virginia, New Jersey and the District of Columbia. A Fortune 500 company, Capital One trades on the New York Stock Exchange under the symbol “COF” and is included in the S&P 100 index.