Today in B2B payments, partners offer more reliable payments than discounts in the B2B sector while Dallas Venture Capital closes $80 million fund for tech startups. Plus, Emiza raises $4.8M for supply chain services, corporate customers present more money management frictions than typical consumers and Paystand now offers automatic billing on its blockchain-based B2B platform.
Dallas Venture Capital (DVC) has closed an $80 million fund that positions the company to become one of the largest tech-focused funds in the Texas city. Among the investors in the fund were Gupta Capital Group, NewcrestImage Ventures, Eternal Lotus Capital Partners and Bioworld Merchandising.
DVC was co-founded in 2020 by serial entrepreneur Dayakar Puskoor and Abidali Neemuchwala, former chief executive of Wipro Limited. It targets early- and growth-stage companies in the B2B Software-as-a-Service (SaaS) sector focused on leveraging deep tech in cloud, artificial intelligence/machine learning, extended reality, data and other emerging technologies.
Deep thinkers in the payments sector and their tech counterparts have worked tirelessly to perfect consumer experience, while B2B payments got less attention. Then, like someone who hit “snooze” and bolted awake running behind, B2B is now innovating like mad.
Next-generation B2B payments are embracing consumerization at a faster clip in the post-pandemic phase as supply returns to meet pent-up demand, all calling for faster payments in the process.
During a PYMNTS On the Agenda conversation, Galileo Chief Product Officer Archie Puri said that B2B is on the tail end of the innovation wave that began a decade ago, and now providers in the space see “jobs to be done” to optimize digital B2B payments.
Emiza Supply Chain Services is the recipient of 375 million rupee ($4.8 million) Series B funding round led by JM Financial Private Equity to benefit the company’s expansion plans, Economic Times of India reports.
Emiza’s work involves helping direct to consumer (D2C) brands with catering and fulfillment needs, and has various services like storage, picking, packing and labeling. Darius Pandole, managing director and CEO with PE & Equity AIFs with JM Financial, said the India eCommerce market had been seeing a massive increase in demand and purchase since the COVID-19 pandemic began.
He added that this came from the new level of internet usage for shopping and similar trends that the pandemic added to. His conclusion was that those companies looking to get more business needed to be working on “superior customer service.” Emiza CEO Ajay Rao said there was a boost in scaling for the company in the last few years and there would likely be even more in the coming years.
International credit bureau CRIF will be working with Penny, an invoice financing provider, to let more U.K. businesses get instant invoice payments, helping small- to mid-sized enterprises (SMEs) based in that country, the release said, with the benefits including invoices paid instantly, cash flow management and more creditworthiness.
It will use CRIF’s open banking and credit scoring with Penny’s instant payment solutions. Penny’s services include invoice financing, letting businesses advance money against what’s due from their customers. The customer will pay Penny directly with terms over 30, 60 or 90 days.
Penny customers will now be able to collect their business bank accounts, which will help with soft credit assessments instantly through open banking, which will create a good picture of a company’s finances. The data will be refreshed daily so businesses that may have been rejected due to credit issues can get invoices paid instantly.
Blockchain-enabled B2B payments firm Paystand is rolling out automatic billing and payment features for NetSuite AR to accelerate time to cash, eliminate transaction fees, and simplify billing.
The new features drive advanced functions for accepting minimum deposits for quotes and also provide an automatic conversion to sales orders upon payment receipt. Instant cash sales for orders and auto-payment at shipment, receipt or fulfillment completion, are also offered.
The company’s NetSuite AR feature gives Paystand customers the ability to enable their AR teams to boost productivity with a collection of self-driving AR capabilities to offer end-customers a better overall payments experience.
Small-to-midsized businesses (SMBs) are showing more and more interest in getting paid more predictably, according to the “Money Mobility Tracker,” a PYMNTS and Ingo Money collaboration. More than one-third of these ad hoc vendor payments for which discounts are available still arrive late, and another one-third are paid just on time — not earlier.
The problem is particularly pronounced for commissions and business-to-business (B2B) marketplace payments, many of which are received even later than other ad hoc payments. A significant part of the problem could be that SMBs lack leverage in persuading buyers to pay according to terms or by payments other than checks, which adds friction to both sides of the transaction.
Improved payment systems and more payment options could help solve the problem. The share of disbursements received via instant payment rails has tripled since 2020, approaching event that of the most common method, same-day automated clearing house (ACH), which commands 22% of disbursements received. In 2021, 17% of all disbursements received were through instant payment channels.
Financial institutions (FIs) are pressed to address a number of key B2B payment frictions, and many are currently working on or planning to work on digital solutions to these challenges. Money management, invoices and payments, data management and providing supplier portals are top concerns among organizations of all sizes, according to “Meeting The Challenge Of Payments Modernization,” a PYMNTS and FIS collaboration.
Smaller financial institutions are more likely than other FIs to report that their corporate customers experience challenges with money management when making payments to their suppliers, with 79% of community banks and 77% of credit unions reporting so. These challenges relate to working capital management, spend management, real-time cash flow management and real-time reporting.
Large banks are more likely to consider data management to be a challenge, with 82% of large international banks and 71% of large national banks reporting that is a challenge experienced by their corporate customers.