We all live with pain, some better than others. I was reminded of that when for the longest time my hands were hurting. I did nothing except get use to the pain. Recently, they healed themselves. Actually, it was a series of cryptic yoga poses that did it. Still, my brain keeps telling me they hurt but they don’t, they feel fine.
In business, it’s no different, we see it all the time – accepting an undesirable situation instead of changing to improve. A couple of years back, I came across a major enterprise still using Lotus Notes for expense management. Lotus Notes! Even with world-class resources available to learn from, they were unable or willing, to improve from a culture of paper-based spreadsheets.
Small and mid-size businesses, don’t have this vendor luxury. They have to learn on their own, when not busy, so never. They manage the obvious pains well, but the stuff they don’t know, seldom gets considered.
It shouldn’t be surprising then when looking to discuss an innovation, they don’t feel the need to make the time. And when they do, assuming they’re not early adopters who get it, distrust lingers in the room like fog from a biblical movie.
Yet when I speak with industry folks about small business adoption of electronic payments, some express surprise things haven’t gone faster. As if the consumer experience with mobile payments should spark B2B acceptance. In a perfect world it would. But when examining how products were marketed, it isn’t surprising at all.
FinTechs – Fishing Where the Fish Are
Of all the unintended consequences fintechs have created in pursuit of bank domain, the neglect of small and mid-market businesses is seldom mentioned. Their business model focuses on selling to early adopters than educating the marketplace.
If it was a bank rolling out these services, with its broad and deep knowledge of business accounts, things would be different. Canadian banks as an example have been around for a hundred years, hate em or love em, their stability has earned a significant level of trust. When they call a meeting to introduce new services, people attend.
Fintechs range in age from now to 20 years old. The trust earned is from the competitive advantages their products deliver. They educate through conferences or self-help from their website – which isn’t a bad thing. The learnings get across, but so too reasons why their kung fu is best. Which waters-down intended effects.
Then there’s choice. Which accounts payable service to choose, or on the receivables side, justifying an interchange fee when cheques are perceived to be free. In the book Paradox of Choice, Barry Schwartz observed that we have more choice than any other group of people, ever. Couple that with a lack of knowledge about innovative products, it’s no wonder inertia and ignorance persists.
Pursuit of a Digital Platform
The landscape is changing. In retail, card payments will be replaced by mobile device “tap and pay,” smartphone “app and pay,” biometrics and other new ways to transact. Further, Europe is projecting instant payments will take a big chunk out of credit card volume over the next decade.
With the developments in B2B payments, similar progress won’t be far behind.
Fintechs are increasingly developing cloud-based solutions that will further expand choice but also lower costs. Banks are exploring open application programming interfaces (APIs), to better connect with technology partners. End result being, improved advice and response to customers, unlike the past 10 years.
Ultimately, small and mid-sized business will get there. It’s inevitable, if they want to remain a going concern. The simple choice comes down to two scenarios; do nothing – wait to surf the wave of critical mass or drown in it. Or pivot, digitally transform to exceed todays and meet tomorrows communication, process and transaction requirements.
For the wait and seer, consider the pain you know and don’t. A spend analysis can help. Then, look to develop a comprehensive digital strategy around your customer needs rather than implementing individual technologies. There’s more, but B2B payments is complicated.
To share a simplified vision of the future, consider the past. For those not old enough to remember watching TV without a converter, it was never a problem. We viewed what was presented without concerns. Then the converter came, things changed. Now watching without controls in hand is an issue. The functionality has become part of our viewing experience.
So it will be with integrated electronic payments. Best get ahead of it.