“The current global context removes many of the long-standing impediments to embracing transformation.”
That statement is from the October 2020 COVID-19-infused edition of McKinsey & Company’s annual report on global payments, yet the sentiment is just as relevant today.
“The COVID-19 crisis is having a significant and widespread effect on global payments across sectors,” kicked off McKinsey’s self-analysis of its report, titled “Accelerating Winds of Change in Global Payments.”
As McKinsey’s analysis indicates, several of the changes resulting from world events over the past year-plus will not fade away as we all eventually settle into our new normal, post-pandemic. “The most striking and potentially lasting impact is an accelerating pace of change in the industry,” according to the report.
The analyst group, which has provided its granular, data-based study of the payments ecosystem annually for the past couple decades, did take more of a long-range view in examining its findings for last year’s report, given the unusual circumstances.
Per McKinsey, “the imperative to accelerate transformations to a digital-first and more agile organization has never been greater, and it exists globally.”
Commercial customers, per McKinsey, should expect greater sales in the partner payments segment due to expected improvements in the end-customer experience and adoption of new business models.
That sentiment is not in a silo.
In an article last year, titled “Slashing Ambiguity in the B2B Partnership Payments Process,” by payments industry content forum, PYMNTS.com, this specialized ecosystem of partnership payments was highlighted as becoming bigger and more complex, rendering a lot of legacy partnership tools obsolete.
“Those hurdles emerge from the very beginning of the partnership journey, with businesses lacking sufficient digital channels through which they can discover and initiate collaborations,” according to the article, noting partner payouts “as one of the biggest challenges in this space today.
“One reason is because there is a lack of clarity and automation in the way businesses measure the effectiveness of a business partner,” per the PYMNTS.com piece.
The frustration on the part of businesses stems from the lack of insight legacy tools allow to gauge the true value of a partnership.
“As a result, understanding whether a contract is in compliance, and how to compensate that payer, can be a maze of complexity and uncertainty,” per PYMNTS.com. “Further, as partnership programs grow larger, organizations must ensure their legal and finance departments are involved in every step of progress a partnership takes.”
Beyond ascertaining the ROI on partnership investments, post-payment, businesses wish to better generate and deliver performance reports and submit 1099 forms. Such efforts to expand these programs – and the potential revenue generation as well – are hindered by a lack of automation.
By embracing automation, the PYMNTS.com article suggests, “organizations can not only gain a clearer view into the effectiveness of their partners, but can support partner loyalty and satisfaction to maintain the revenue bumps they yield.”
As the complexities and risks associated with the changing B2B partnership landscape continue to expand, so will the importance of technology and automation.
If the idea of automating your partner payments is still not a slam dunk, consider the following potential benefits:
- Faster cycle times – as they say, time is money
- Cheaper transactions – electronic payments are much cheaper than paper checks
- Fraud prevention – far and away, checks are the most frequent target of fraud
- Error reduction – prevent overpayments and duplicate easier and faster
- Increased visibility – capture the necessary financial data for analysis and potential improvements
Automating your partner payments just makes sense.
Contact us today to learn how RecVue’s order-to-cash solutions can unlock the potential of your partnership investments and realize that untapped revenue.