Justin Main is Vice President of Integrated Payments for Billtrust, a B2B accounts receivable automation and integrated payments leader.
Twenty-five years old. That’s the age of the oldest members of Gen Z, those born between 1997 and 2012. And although those 25-year-olds are just out of college and beginning their careers, before you know it, they’ll be business-to-business (B2B) buyers. How do we as suppliers best prepare for them as they become our next generation of buyers? Will we be able to provide a digital-first, embedded payments environment for them that matches the sophistication of what they’re already used to as consumers? I believe that firms that do this best will outperform their peers. Here are some ways to get there.
Make customer experience more important than ever.
More brands are competing on customer service, instant access and personalized experiences than ever. In fact, for younger generations, it often only takes a few poor interactions to send them elsewhere. Research done by my company found that the majority of Gen Z consumers would stop doing business with a brand after just two or three less-than-stellar experiences. And digital payment acceptance is a big piece of that for Gen Z: 74% said that a brand or retailer accepting new forms of digital payments has a positive impact on their brand perception.
On the B2B side, great strides have been made toward digital payments adoption, and aided by the pandemic, the once-ubiquitous paper check has experienced a steady decline. But, as you’ll read, paper checks still represent a significant portion of B2B transactions, and digitization needs to become more pervasive for companies wanting to outperform.
Reduce your dependence on paper checks.
With 20% of Gen Zers having never used a paper check—and 36% of them reporting not using one in the past six months—paper checks are fading fast in the consumer world and will likely continue to do so. And while more people are switching from cash, debit and credit cards to mobile payments, what strikes me is how dependent the B2B payments world still is on the paper check. While consumers are leaving checks behind, businesses aren’t at the same rate. In fact, 33% of all business transactions are still made by paper check in North America, according to the Association for Finance Professionals. To prepare for Gen Z’s preference for digital payments, finance teams must commit to modernization by eliminating the need for non-digital, non-embedded payments while moving to create welcoming environments for accepting digital payments.
Embrace digital B2B payments networks.
Monthly peer-to-peer (P2P) platform use—think Zelle, Venmo and PayPal—among Gen Zers rose from 79% in 2019 to 93% in 2022. In parallel, we’re also seeing increased traction for digital payments networks on the B2B side that serve as translation engines and money movement tools. For suppliers receiving payments, digital payments networks can act as a single aggregation engine for payments and remittance data so cash can be easily applied into an enterprise resource planning (ERP) system. While B2B payment networks are relatively new and often require a high level of sophistication to handle complex B2B transactions, Gen Z will most certainly be demanding B2B tools that work as conveniently and seamlessly in their professional lives as these P2P platforms do in their personal lives.
Prepare for seamless credit card acceptance.
Gen Z’s credit card debt is rising three times faster than other groups. The desire to pay with credit cards and delay payment is also rising significantly in B2B payments. As Gen Zers enter the finance space, many will likely expect suppliers from whom they buy to seamlessly accept credit cards—especially virtual cards, which offer a one-time, randomly generated card number—so they can take advantage of rebates and extend float. Suppliers need to prepare for credit card acceptance with an infrastructure that integrates neatly with ERP systems or other accounts receivable technology to enable straight-through processing, along with the ability to pass Level II/Level III payment data for interchange savings.
Because Gen Zers will be in B2B buying roles before we know it, let’s be sure that when it comes to B2B payments, we’re all ready to meet the needs of these digital natives by delivering the digital-first payments sophistication they’ve come to expect.
Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Denial of responsibility! galaxyconcerns is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.