How to create a better payments experience for business customers

Deluxe’s senior product manager Layne Kight sat down with BAI’s managing editor Terry Badger to share ideas on how banks and credit unions can create a better payment experience for their business customers. During the Banking Strategies Podcast, the two discussed the case for financial institutions (FIs) to develop a more digitized payment structure and what steps to take to help their business customers transition from paper-based to digital payment processing.

What is Deluxe's mission?

“Our mission is to help businesses pay, get paid and grow. We are in the business of being great partners to financial institutions and with businesses to really help them streamline all of their cash processing, their receivables, their payables and their data. My job within Deluxe really stands on the digital receivables solution.”

Where do you see most businesses in the digitization journey?

“It’s kind of a mixed bag. There are businesses that are really far down the path and some that are just beginning the journey. I think most businesses have started and are making progress, but there is still a long ways to go for many organizations. A lot of it has to do with access to technology, especially in the payments space. It also has to do with a lot of legacy infrastructure that’s In place at many business and how they go about handling that and transitioning into a more digital-friendly, electronic-friendly environment.”

Where do financial institutions fit into the digital payments transition?

“As we've looked at it over the past five years, there was a focus on many different aspects of the business, such as the payable side of the house and the technology infrastructure side of the house, that I think a lot of the focus is starting to turn more to the digital collections applications or their receivable solutions. Many banks are at a place where they're in a good spot to start delivering on this. But I also think there is still work to be done in evaluating how we really can make this a frictionless experience for a lot of the customers who are looking for those digital capabilities.

Just because the end customer chooses to pay digitally, that doesn’t mean that the transaction stays digital. It’s important for the financial institution to make sure their corporate customers are prepared with a solution that accepts digital payments and keeps things digital through the process.”

Why does having a more digitized payments infrastructure make sense?

“There is a lot to be gained by switching some of these digital solutions, whether that’s efficiencies with a financial institution’s back office, efficiency with their clients and efficiency with what they are delivering. … There has been a bigger shift away from just that pure top line revenue to focusing in on a lot of the profitability and margin. That is what these digital solutions really helped to drive, not only for the banks, but for their clients as well. They're not only delivering on the client satisfaction and efficient processing, but it helps drive the business and the foundations of things on the balance sheet by providing a lot of that margin expansion and profitability that banks are looking for in solutions that they offer today.”

What's holding financial institutions back on this digitization journey?

“The idea of this digital revolution or digital transformation can be overwhelming. Many organizations don't know where to start when they think about what to do and where to begin. So having a really clear-cut strategy that puts their clients at the forefront of what they're looking to do is going to be critical moving forward. On top of that, I think one of the hardest things as all of our banking friends can attest to, finding the right partner can be a challenge.”

How can FIs help their business customers?

“The most important thing that banks can do is be a consultative partner to their clients. In previous years, as commerce has expanded and in the digital transformation has expanded across all avenues of business, banks were in the game of selling products and solutions. Now, banks need to be in the game of being consultative partners and helping businesses drive that strategy.

For those in the midst of their transformative journey, I would say look to the industry, look to your peers and really keep a pulse on consumer trends. That’s important to identify where the next steps are going to be happening and what the next evolution is going.”

Interested in more details? Listen in to the recording to hear more insights from Kight and what steps an FI can take to better their business customer’s experience with digital payment processing. 

Source: Kight, Layne. "Creating a better digital payments experience for businesses." BAI Banking Strategis Podcast, March 2023.