Why B2B Payments Need a ‘BizPal

Businesses and government departments worldwide are trying to streamline their payment processes, giving them more control, flexibility and speed. A solution modeled on consumer payments provider PayPal, but tailored to the needs of business users, might be the answer. Des Cahill, managing director of First Data Commercial Services, discusses.

Global commercial spending grew by almost 11 percent between 2006 and 2007 (*), a clear sign of the expanded opportunities for vendors at all levels to join the ranks of global suppliers to an increasingly diverse and accessible buyer market.

While globalisation has fuelled the availability and distribution of goods and services as never before, support and administration systems in most corporates have not kept pace. In particular, the choice of payment method for business-to-business (B2B) transactions lack innovation and are rooted in legacy technology. Paper-based payments such as cheques make up a significant proportion of this legacy. For example, Forte Consulting Group estimates that 75 percent of B2B non-cash payments in the United States are still cheques.

By contrast, consumer payments are rapidly migrating from cash and cheques to electronic payments. In several European countries, electronic payments make up the majority of all consumer transactions.

Meanwhile, when on-line, we more frequently use PayPal or similar services to make secure anonymous payments. What is clearly needed is a similar ubiquitous payment method for business to business transactions, a sort of “BizPal” for B2B.

Download White Paper Here