April 24, 2024
October 18, 2024
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How South African enterprises can tackle B2B payments complexity

Today, large B2B enterprises need their payments stack to perform a multitude of functionalities. However, many existing solutions are not built to meet all their needs. Here, we explore how these businesses can leverage payments orchestration and recon solutions to manage inherent complexities and streamline their finance operations.

Jess Manthey, Enterprise Platform Partnerships Lead
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How South African enterprises can tackle B2B payments complexity

Large B2B enterprises need their payments stack to perform a multitude of functionalities. Often managing multiple divisions, multiple customer segments, and at times multiple geographies, finance and payments teams within these businesses juggle a lot when it comes to optimising their payments processes. This might include multiple integrations with payments providers or banks, ongoing maintenance development work and cross-departmental or potentially cross-market complexities. However, today it’s almost impossible to build a system that can manage existing complexities while still remaining flexible enough for the future.

Payments is a complex topic. For businesses of all sizes, integrating, managing and reconciling different payment methods as demanded by consumers can pose a significant challenge. For large companies with multiple departments or subsidiaries, or for those reaching across multiple markets, these challenges are only compounded, as systems also need to be able to sit alongside supply chain, logistics, procurement and a dozen other departments that all have their own needs and challenges.

Solving each challenge requires optimising the payments system for a different objective: building for scale is easier if you bring standardisation across systems, but enabling flexibility and also localisation is easier with decentralisation.

We work with a lot of large enterprise businesses to help them optimise their payments stacks and streamline financial operations. In our experience, the challenges they face typically come in three main forms:

Serving multiple customer segments

The first is the complexity that comes with serving many different types of customers. Large enterprises often have to solve for a wide range of use cases. Each of these segments might present different requirements and fulfilment needs, such as customer type, order value and volume, order frequency, payment terms and even fraud, risk and compliance concerns. The challenge lies in meeting the needs of these widely different parties, and offering them sufficient choice and flexibility in how they wish to pay, while still keeping payments as centralised as possible.

Businesses working with legacy systems will also face innovation friction and stagnation when they are trying to solve for multiple customers. It’s not unusual for us to speak to an enterprise that has spent the last 12 months building out or optimising its payment infrastructure, only to find that they are unable to integrate a new payment method when it becomes available.

Multiple systems working together

The second area of complexity lies in the many different systems required to keep a large enterprise running properly. Large clients we work with that are reliant on legacy systems often raise issues with the fact that their reconciliation and settlement systems feed into their ERP, while the data and services feed into the back office. When data flows are siloed like this, it can be difficult to ensure that everyone has all the data needed to operate correctly.

Case in point: many businesses rely on manual EFT or transfers because this payment method is affordable, with low fees; and static, meaning it does not require a complex technical integration. However, settlement can take up to T+4 and, more crucially, reconciliation relies on customers using the correct references when paying. This is manageable when a business is working with a small volume of customers making small, non-time-sensitive payments. But a R3 million order that needs to go out the next day is a different matter.

In these cases, reconciliation can be a challenge, and fraud can be an issue, as there is no visibility for the business on who initiated the payment from their bank account.

Often, these businesses accept payments across multiple channels, using multiple providers and payment methods. They need to allocate payments to orders and reconcile incoming funds to ensure all orders have been paid for. It can be difficult to manage fragmented payments initiation data and formatting, manage settlement data from various banks and ensure proper allocation and reconciliation. 

Managing third parties

The third complexity arises from questions of authority. Often, when speaking to large enterprises about their payments infrastructure, we meet with representatives from across the business, including e-commerce teams, payments team, product teams, business development teams, IT teams as well as accounts receivable & finance teams - all of whom will be impacted by any changes made to the payments stack.

The challenge with finding a balance and clear way forward with regards to consultation, collaboration, execution and ownership across multiple stakeholders (with very different pain points) can be very tricky and time consuming.

Of course, many companies choose to solve these challenges by taking advantage of their scale to engage directly with banks. This can work, but only if a business is willing to invest in building out their own internal payments company, which is very labour- and resource-intensive. 

Finding the right payments partner

The right payment specialists can bring up-to-date knowledge and precise solutions to help businesses solve payments challenges and remove complexities. The team at Stitch brings automation, agility and deep localised knowledge to enterprise payments stacks - and our team works hand in hand with clients to develop custom solutions that can meet their needs. We also continually innovate on fraud prevention and mitigation solutions via Stitch Shield, as the ecosystem evolves.  

With Stitch, clients can run their payments operations more flexibly and with fewer people: often a team of 15 or more can be replaced by a team of two or three, leaving clients with significant resources to redeploy to other areas of the business.

In addition to our optimised payment methods, we designed orchestration and reconciliation platform PayOS specifically to support large enterprises managing payments complexities. PayOS connects to all payment platforms and bank accounts in the payments stack, enabling teams to manage all payments in one place, easily set rules, optimise performance and extract standardised initiation and settlement data.

Learn more about how we can help your business optimise and transform your payments stack

Scale faster with Stitch