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Ecommerce


sent as pdfs via email or input into an ordering system. Tey will still need to be checked, reconciled against a purchase order and entered manually by the supplier, and oſten printed out and filed. Accounts payable and accounts receivable are skilled professions and entire departments are dedicated to these functions at larger companies. Tere are ways to automate this process and significantly speed


it up, and of course corporate credit cards can be used on smaller purchases to pay instantly, but these only work if companies on both ends of a transaction agree to use them. If a supplier is using paper- based invoicing, then anyone who buys from them will be forced to use it, no matter how modern their customers are. Te end result of these inefficiencies is that when a company sends


an invoice, it enters a queue behind dozens or even hundreds or thousands of others, leading to huge delays. Furthermore, this system is prone to errors, either from mistakes during manual entry or simply losing a paper invoice. If this was how B2C commerce worked, then the entire economy would grind to a halt, but because of outdated practices and much more stringent reporting requirements, many businesses are burdened with it.


The disconnected payments process Another just as profound inefficiency can be found in the payments process – one unit of the bank allows a company to accept payments, but that company must use a separate area of the bank to make payments to suppliers. Tese two areas of the bank act as separate companies even though they’re all under the same roof, and their clients must use completely disconnected systems for accepting and issuing payments. Typically, each will have a separate contract, further compounding the disconnect between the two halves of payments. Tis also makes reporting and reconciliation more difficult as they take place on two systems - and adding fraud prevention into the mix just adds an extra layer of complexity. One key problem with this level of disconnection is that when


incoming and outgoing payments systems aren’t ‘talking’ to each other, companies have to wait for payments to go through the lengthy process of coming into the company’s account before the funds can be used. Tis leaves companies unable to pay their suppliers, and in some cases their staff, while they wait. Cashflow problems are what will cause a business to end – a


company can have any number of problems, but as long as it has more money coming in than going out, it will be able to stay afloat. When cashflow problems begin, they rarely resolve themselves – a company will usually enter a death-spiral that only a major exogenous event will be able to pull them out of. Major US-based home goods company Bed, Bath and Beyond is the latest company to suffer such problems, with a lack of funds resulting in empty shelves and ‘lacklustre inventory’, leading in turn to customer dissatisfaction, fewer sales and less cash to turn around its fortunes. Te root causes of Bed, Bath and Beyond’s decline are complicated, but ultimately the company could disappear completely because of cashflow problems. Being able to access funds immediately rather than waiting


days, weeks or months for payments would clearly be a benefit. As a major retailer with thousands of suppliers, being able to bring the entire supply chain into the 21st century by linking up the two halves of the payments process would also be highly beneficial to solving cashflow challenges.


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The growing fraud problem Te third piece of the payments process is fraud prevention. In 2022, a PwC survey found the highest rate of fraud in the twenty years that the survey has been taking place. 53% of respondents reported financial losses because of fraud, three quarters of which comes from ‘platform fraud’ – unauthorised purchases from a digital platform such as an eCommerce site – or more complex schemes such as identity theſt. A payments system in which fraud prevention isn’t integrated into


a greater whole will always be insufficient. As we saw above, active fraud prevention takes place at a specific point in the payments process – typically as a final check before the customer’s details are sent to an acquirer, and possibly when the customer logs into their account. Tese checks will oſten look for one of the many tell-tale signs of fraud – a transaction coming from a different IP address, the use of virtual machines, even behavioural forensics factors like whether a user types like a human being or like a computer copying and pasting information. If this important function is taking place in its own silo rather


than as a part of a holistic payments system, then although it may work perfectly well as anti-fraud protection, a company will lose valuable data that can be gained from having everything in a single platform, slowing down their decision-making and making forecasting more difficult.


Advantages of a unified platform So, we have seen the problems that come from having a disconnected payment system, but what is possible when all the elements of a payment system – accepting payments, making payments, and preventing fraud – are connected? Te first and perhaps most significant improvement is that if


paying in and paying out funds are connected, then it becomes possible to use the funds that are being sent to your company instantly instead of waiting several days for funds to make their way through the convoluted payments process. Tese incoming funds can be placed directly onto virtual cards in real time, which adds significant value to your bottom line. A single unified solution is also much easier to integrate – just


one part of a disconnected payment system can take months, or even as much as a year, to integrate, particularly if a merchant has specific requirements. All-in-one payments solutions can take less than a month, saving companies hundreds of thousands of pounds. Since your incoming and outgoing payments are in a single platform, it is much easier to have a high-level oversight on all of your payments and fraud prevention efforts without having to integrate a third-party system.


Changing how payments work Payments have been in a disconnected state for decades now, and it has been standard practice for so long that merchants may not realise that it doesn’t have to be this way. It is possible to have each piece of the payments process connected seamlessly and in doing so access new ways of getting paid that build up cashflows that today’s merchants need.


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