Automation plans were accelerated

One of the most significant takeaways from the pandemic and its impact on our industry was how exposed businesses were to error, fraud and inefficiencies when relying on outdated, manual payments systems. Manual, cash-based methods were slowing businesses down, adding costs, and leaving huge scope for error and risks. It was clear that deploying technology that can manage supplier payments at scale, efficiently and effectively would be crucial in helping businesses get back on their feet. 

Take for example the travel industry; where firms had been relying on outdated payment methods such as cash, they were subsequently in a weak position to dispute transactions with the many suppliers involved upon the mass cancellations caused by COVID-19, leading to both financial and reputational damage. However, when using an automated process such as a Virtual Card, they benefited from chargeback rights set by the payment schemes, such as Mastercard and VISA, more seamless integration with existing systems as well as reducing the scope for human and administrative error.

While automation and the digitization of payments was a trend already underway before the pandemic, the implications of COVID-19 meant businesses needed to streamline efficiencies more than ever; and at a greater pace than expected. 

A recent report from forecasts nearly 420 billion transactions worth US$7 trillion are expected to shift from cash to cards and digital payments by 2023 – and increase to US$48 trillion by 2030. In addition, with three-quarters (75%) of surveyed bank executives saying that the pandemic has increased the urgency of their plans to modernize payment systems. 

COVID-19 bolstered Cloud uptake

Using cloud-based payment solutions helped businesses offer thousands of refunds in a timely manner, particularly those in industries impacted by the ongoing nature of partial lockdowns. Cloud-based solutions were recognized for their agility and reliability  and ‘always on’ nature that businesses so desperately needed in managing their workflows during this time. According to ’s Chief Architect, David Knott, investing in systems to accommodate cloud infrastructure can cut IT costs anywhere from 50% to 90%.

The trend is seeing no signs of abating. New findings from have revealed that cloud spending is up and has not been hampered by the ongoing COVID crisis. Q1 2020 spend on cloud infrastructure services reached $29bn, up 37% over the same time last year. Despite the inevitable economic downturn in the wake of the pandemic, cloud spending is estimated to rise 19% according to

The role of the payments provider was elevated

The pandemic highlighted the true value that payments technology can have for a business. It reinforced that backend, manual processes are no longer viable due to behaviors such as working from home, and that we need to look at new technologies to help automate archaic processes. Not only did businesses come to realize how investing in payments technology could help eliminate inefficiencies during uncertain times, but also offer customers extra value, which is imperative for a business to rebound right now.

Digital payments helped enhance customer choice, allowing those who use them to do its business greater ease. For example, many card providers can offer multiple card schemes, payment types, currencies, issuing and settlement locations – giving companies optimal choice and flexibility to support them as they look to stabilize business volumes. It was this digital agility from payments providers that provided many businesses with the resilience they needed to stay afloat during the pandemic.

A testament to the opportunity that can come from digital payment transformation, our ����Vlogresearch showed that 86 percent agree that companies that lead with technology will thrive in recovery from the current economic and health crisis and that and 83 percent have leveraged payment technology to innovate new sources of business value.

In addition, our ����Vlogresearch in collaboration with The Economist revealed that 72 percent of executives in financial services and technology are more digitally agile than before the pandemic.

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The innovation and disruption we have seen in digital payments over the last twelve months is just the beginning. I predict 2021 is going to be a defining year for the payments industry. Collaboration will be key as business reshift priorities and begin to explore ways to leverage payments to deliver a better experience for customers, drive out inefficiencies and create new opportunities.

Greater push for global B2B payments innovation as prompted by COVID-19

While innovation in B2B payments was gathering speed pre-COVID, B2C movements in the fintech and payments space had always been the forefront of payment news and stories, with consolidation, partnerships and the growth of start-ups in the sector dominating much of the talk for the past decade.

However, COVID-19 exposed the pitfalls of businesses neglecting investment in B2B payments technology. Those companies that relied on outdated, siloed B2B payment systems before the pandemic were more exposed to issues of fraud and soaring costs with negative implications on customers and supply chains.

As such, we have witnessed the potential over the past year for B2B payments to add greater value and solve bigger problems for firms as we have with consumers. It has created a ripe environment and a hotbed for B2B payments transformation, not starting, but catalysing of innovation in this space.

We are now seeing significant innovation in the B2B payments space, and it’s a really exciting time, with experts and analysts expecting the market to continue to grow exponentially over the next few years. estimates that the current global business payments market exceeds $100 trillion, encompassing all forms of payment. In addition, we are seeing increased collaboration and consolidation between players in this space as they move to expand and innovate their offerings to customers.

Traditional institutions are looking to upgrade

While the pandemic may have left some thinking investment into tech platforms can be put on the backburner, 2020 proved that this is not the case, and we should see investment into tech and the modernisation of payments continue to grow as it becomes a more pressing business priority.

Retail banks and traditional financial institutions had previously relied on outdated, legacy systems that provided no agility; however, we’re starting to see such businesses wake up to the return on investment that upgrading these systems can have.

Our recent in partnership with The Economist Group, found that over a third (39 percent) of executives in financial services had thought about implementing new technologies including data analytics, while 42 percent thought about modernizing technology platforms and infrastructure for customers. The results show there is a clear new direction in the marketplace, one in which executives are reviewing their workflows and supply chains and ultimately looking for a digital-first approach.

New findings from Synergy Research Group also revealed that cloud spending is up and has not been hampered by the ongoing COVID crisis. Q1 2020 spend on cloud infrastructure services reached $29bn, up 37 percent over the same time last year. Despite the inevitable economic downturn in the wake of the pandemic, cloud spending is estimated to rise 19 percent according to making clear this demand from traditional instructions for greater security, scalability and cost savings.

Increasing collaboration between fintechs, banks and tech players

2021 will also be the year that the increasing integration between platforms, fintechs and banks comes of age as businesses increasingly looking towards simpler, one-stop ‘plug in’ systems that can suit their every need under one roof.  The big question for banks at the moment is whether to build, buy or partner when it comes to adopting new technology or innovation. This is a topic explored in depth by WEX’s Greg Sassone, Senior Vice President of Business & Partner Growth discussed this in a recent .

While we have continued to see increasing M&A in the payments industry, something more common that we are seeing at WEX, is an increased adoption of white labelled collaborations between fintechs, payments players and traditional financial institutions.

In a long-term view, this will be key to sustaining healthy momentum, innovation and a competitive peer set within the payments sector. On the fintech side, some new market entrants have built innovative and outstanding, but are challenged as they have no entry point with traditional financial institutions that are looking to adopt it and embrace innovation. Therefore, we’re also expecting fintechs to track down partners that can help bridge their world with that of the larger institutions.

Payments providers will add value

The pandemic highlighted the true value that payments technology can have for a business, as it reinforced that back-end, manual processes are no longer viable due to behaviors such as working from home, and that we need to look at new technologies to help automate archaic processes.

This is true particularly in times of crisis where the relationships between buyer and supplier are under increased focus and require higher levels of trust to be efficient. In fact, it is digital agility from payments providers that provided many businesses with the resilience they needed to stay afloat during the pandemic.

Our ����Vlogresearch shows that 72 percent of executives in financial services and technology are more digitally agile than before the pandemic and 83 percent have leveraged payment technology to innovate new sources of business value. A testament to the opportunity that can come from digital payment transformation, 86 percent agree that companies that lead with technology will thrive in recovery from the current economic and health crisis.

It’s clear that 2021 just marks the beginning of an exciting journey ahead of the digital payments industry. As innovation in B2B payments builds more momentum, businesses will need to keep their eye on the ball, and to look to how they can continue to evolve and innovate for their customers. Those that can keep up with the fast pace of digital innovation and transformation will be the ones to succeed.

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It’s actually shown that there’s been real momentum in B2B digitisation over the last 12 months. Now, while we have seen a significant amount of payment innovations in the consumer world, with systems like contactless and ApplePay, B2B was yet to embrace the simplicity of making digital payments and using a device in the same way – until now.

Today there are huge investments in the untapped and untouched area of digital B2B payments. People have finally caught on that there are trillions of dollars that can be digitised and now is the time to take advantage and make an impact. There has been a huge increase in demand in 2020, in particular with the pandemic, reinforcing that back-end, manual processes are no longer viable due to behaviors such as working from home, and we need to look at new technologies to help automate archaic processes. This is true particularly in times of crisis where the relationships between buyer and supplier are under increased focus and require higher levels of trust to be efficient. 

In fact, it is digital agility that provided many businesses with the resilience they needed to stay afloat during the pandemic. A , commissioned by ����Vlogin collaboration with The Economist Group, found that 72 percent of executives in financial services and technology are more digitally agile than before the pandemic and 83 percent have leveraged payment technology to innovate new sources of business value. It also found 39 percent had thought about implementing new technologies including data analytics, while 42 percent thought about modernizing technology platforms and infrastructure for customers. The results show there is a clear new direction in the marketplace, one in which executives are reviewing their workflows and supply chains and ultimately looking for a digital first approach. 

This research reveals how payments innovation positions finance and tech business for growth, revealing commercial businesses are having to implement data led solutions. There are four driving factors key to curating this interest in digital transformation:

1. Improving business efficiencies
2. Greater working capital
3. Revenue
4. The rise of cloud-based solutions

What a Cloud-Based Solution Can Mean for your Business

New findings from have revealed that cloud spending is up and has not been hampered by the ongoing COVID crisis. Q1 2020 spend on cloud infrastructure services reached $29bn, up 37 percent over the same time last year. Despite the inevitable economic downturn in the wake of the pandemic, cloud spending is estimated to rise 19% according to

During the pandemic, using cloud-based solutions helped businesses offer thousands of refunds in a timely manner, particularly those in industries impacted by the ongoing nature of partial lockdowns.

The agility and speed of a cloud-based solution is critical to scale up or down. Our own cloud-based processor has achieved an uptime of 99.99%, resulting in an always-on processor for our customers. The speed by which we’re able to start processing transactions has increased substantially – we can set up new accounts within hours now, where this used to be a few days.

Being in the cloud and working with Amazon Web Services has helped us as a business become more effective. In fact, it’s one of the greatest things we’ve done, and our customers recognise the value too. A cloud offering can improve:

• Resilience
• Uptime 
• Agility and speed
• Innovation space
• Cost

So, what have we learned from the pandemic and how do we embrace this new era and digital tipping point?

Key Takeaways

• More choice and flexibility: More and more businesses have recognized that a new normal is here. As a result, they want more flexibility on payments so they can work with more suppliers around the globe.
  
• Better technology: Rather than reducing investment, if not already done, now is the time for businesses to upgrade and streamline their technology and payment platforms to futureproof themselves post-pandemic. A cloud-based solution offers better resilience and faster innovation in the long run.
• Fully Integrated Payables Platforms: Building bridges between accounts payables (AP) platforms and receivables (AR) platforms adds value and right now, we at ����Vlogare working on elements on the AP/AR connection. Doing so will not only help streamline operations but will add value for firms – unlocking efficiencies and allowing them to focus on their core business
• Market Expertise: We know businesses are also looking for much more than just a payments and technology provider – the expertise of their partner and its unique understanding of unique market challenges will be crucial to help stand out from the crowd.

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�ٱ���Ǿ��ٳٱ�’s notes that payment service companies have responded to the changing environment with modernization, technology investments, targeted mergers and acquisitions, and partnerships with fintech companies. 

For suppliers, the challenge with evolving payment methods can be the —from A/R to reconciliation. So, what’s a travel company to do to keep up? Find the right payments partners to grow with. 

The three key ingredients for a powerful payments collaboration include:

1. Flexible and scalable solutions

Many payment platforms have been incrementally built over the years on legacy technology, which can lead to flexibility, scalability, and performance issues. This technical debt can weigh down a platform and inhibit innovation.

WEX’s proprietary technology can harness massive amounts of data and deliver insights that help each individual customer make better business decisions. For example, having an  in-house cloud native global processor (versus using an external third party processor) means customers gain greater flexibility, reliability, and are able to leverage the latest technologies.  

2. Technologically savvy services 

����Vloginvests a great deal in technology, including robust APIs to integrate into systems that provide our partners with maximum choice across multiple card schemes with a single front end. 

Cart abandonment rates in travel are the highest among all sectors, so travel companies need to be able to offer their customers the latest payment methods—from next generation digital wallets to local payment schemes. a few years ago found that the majority of the top international merchants worked in at least six currencies so that consumers could pay in their preferred currency. Over expect travel companies to offer multiple payment options. A former director of global checkout and payment products for Expedia noted, “payment innovation is a huge area [in which] we’re interested, adding , because it’s all about making the experience as enjoyable and easy as possible for consumers.” 

3. Responsive and intuitive customer service

A payments services partner needs to be a true collaborator—understanding customers’ current and future needs as well as their unique pain points so they can deliver options tailored to their specific requests. Customized payment solutions need to take into account the tools customers are already using, the processes they have in place, and where they and their suppliers operate.

WEX’s unparalleled experience in the payments space enables us to rethink how payments serve our customers and create the perfect solution. 

Payments partnerships today and tomorrow

There are no signs that changes in the payments landscape will slow down any time soon. Payment services companies, travel companies, and suppliers will need to continually collaborate and innovate so they can effectively and efficiently meet travelers’ changing needs.  

Ensuring these partnerships are built on flexibility and scalability, technological savvy and responsive, and intuitive service is key to everyone’s success. The Deloitte 2020 report predicts, “forward-thinking organizations will also necessary to survive and thrive in the increasingly competitive payments industry…especially as payments providers expand their efforts to service the needs of many and provide a customer experience that delivers ahead of the curve.

Find out more about WEX’s solutions

Contact us for more details by emailing WEXCorporatePayments@wexinc.com, or learn more.

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Interaction & Partnerships
As these companies, some of the most successful in the world, demonstrate, the platform business model is rapidly replacing the once ubiquitous pipe business model. In the pipes model, businesses create value and then send it downstream for customers to consume. The customer doesn’t have much say in what is produced. In the platform model, however, customers, partners and other businesses play a critical role in creating value. Imagine Facebook without your “friends” or Amazon without reviews. The interaction and contribution of different groups of people make the platform what it is.

Innovation
Another key trait of platforms is innovation. Since the platform is centered around the customer experience, it is critical that the experience is the very best. That requires constant innovation to stay on top of, and ahead of, both customer desires and the latest technologies. From user interfaces to back-end algorithms, platforms are constantly pushing the envelope to provide a unique and seamless experience for its users.

Scalability
The third trait that defines platforms is the ability to scale at speed. If a platform can’t grow as fast as its customer base, another platform is bound to take its place. Successful platforms must ensure that their technology can scale and also that their product offering can evolve. This can be done in two ways: by investing in technology and talent, and through the acquisition of companies that enhance the offering. As one example, Booking.com started out as a hotel website. Now, through strategic acquisitions, they have a portfolio of six brands that offer customers the full suite of travel offerings, from hotels to flights to car rentals and even restaurant reservations. CEO of Booking Holdings, Glenn Fogel, has been vocal about wanting the Booking brand to be synonymous with travel for consumers and the go-to place to research, book and buy travel.

Partnering With A Platform
So how can your business benefit from learning about the platform model? First, you may consider how to incorporate the three traits of platforms into your business – interaction and partnerships, innovation, and scalability. Second, you can consider partnering with an established platform.

Platform companies are beneficial to partner with because they have a vested interest in making their platform the best it can be, which means you can focus your energy in other places. Companies that partner with Expedia get visibility, marketing, and global reach. A company listing its product on Amazon gets access to their customers, and also their technology platform, search functionality, and the expertise available to a billion-dollar company.

A Platform For Payments
Just as Booking.com aims to be synonymous with travel, ����Vlogstrives to be the platform where businesses go for all things payment. As a payment platform, ����Vloggoes beyond a product offering and provides a solution to maximize its customers’ payment strategies. Just like Expedia and Booking.com, ����Vlogharnesses the power of platforms to provide an experience built around the customer, informed by the customer, with heavy investments in innovation, and an eye toward scaling at speed.

����Vlogdoes this by focusing on these key areas:

1. Expertise: ����Vloghas unmatched industry expertise and the strategic know-how to guide each customer to a best in class payment solution.
2. Technology: ����Vloginvests in and owns its technology platform so it can fully control and evolve the platform to meet ever-changing needs.
3. Agility: From ensuring we have the currency and issuing capabilities to enable truly global payment strategies to building robust product optionality and expanding our partnerships to achieve maximum acceptance at best cost, we are one step ahead of the rest.

The real value in partnering with a platform like ����Vlogor Facebook or Amazon is that you’re not buying a static product that will soon be outdated. You’re partnering with an expert in the field who is dedicated to being best-in-class, an early-adopter, and who puts the customer at the center of its offering. That is the power of a platform.

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