The scope for digitalisation for B2B payments is vast, but the journey is not without its obstacles for businesses and their banks to navigate. TMI’s Editor, Eleanor Hill, recently caught up with Bruno Mellado, Head of Payments & Receivables, BNP Paribas, to look at what’s new in this space and the possible implications for treasurers.
Eleanor Hill, TMI (EH): Payments innovations tend to focus on the B2C space, for obvious reasons. Why is it important that we give B2B flows similar prominence?
Bruno Mellado, BNP Paribas (BM): On the consumer side, around 70% of all purchases are made electronically from order to fulfilment. For businesses, only about 30% are treated digitally end to end from procurement to fulfilment but this will likely increase drastically in the coming years. That means there’s plenty of room to digitalise how small businesses order and pay their suppliers – and also how they themselves get paid. Rather than processing this manually and checking emails to find out the status of payments, the entire workflow could easily be automated through a fully digital process.
In addition to the potential benefits of automation, there are new mandatory requirements to send B2B electronic invoices in the pipeline in Europe. This requirement already exists in other parts of the world, such as in Mexico with its local XML format CFDI, and Brazil, which has regulations for various electronic invoices, covering supplies of goods, services, freight and more.