This Week in B2B: New Year, New Back-Office Innovations

The B2B payments landscape is at a pivotal juncture as 2025 approaches.

On one hand, the imperative to digitize and integrate payment processes has never been more pressing. On the other, legacy systems and entrenched processes pose significant obstacles, creating a delicate balancing act for businesses striving to modernize.

Understanding these dueling imperatives is key to navigating the future of B2B payments, as organizations grapple with how to innovate without compromising existing workflows.

Success may depend on embracing a strategic approach that balances the need for innovation with the realities of legacy infrastructure. By tackling modernization incrementally, leveraging partnerships and fostering a culture that champions change, businesses can work to chart a path forward that helps ensure both operational excellence and future readiness.

After all, it wouldn’t be a B2B new year without something old and something new.

The Digitization and Integration of B2B Payment Processes

The digital transformation of payment processes offers unparalleled opportunities for efficiency. Manual processes, still prevalent in many B2B transactions, are fraught with delays and errors. Digitized systems, by contrast, enable real-time payments, automated reconciliation, and streamlined approvals, reducing operational friction and enhancing cash flow visibility.

There are two sides to any commercial transaction. Within B2B, buyers and suppliers find one another and agree on terms, funds flow, and accounts payable and receivable departments interact. “The 2024-2025 Growth Corporates Working Capital Index,” a PYMNTS Intelligence report commissioned by Visa, found that the integration of suppliers — through digital means, as their billing systems are linked to the buyers’ payment operations — can improve cash flow for both parties, and by extension, create B2B ecosystems that are efficient.

Top performers integrated twice as many suppliers into their systems as lesser performers, as there was an overall 34% boost in supplier payment integration.

As the calendar year’s worth of PYMNTS Intelligence studies have shown, accounts payable (AP) and accounts receivable (AR) automation are increasingly becoming key areas of focus for businesses looking to eliminate manual B2B processes and corral their disorganized tech stacks. That’s why we dug into the how, why, and where this transformation is taking place across B2B payment processes.

“We’ve seen tremendous growth in virtual cards over recent years,” Widad Chaoui, vice president and general manager, corporate program product management at American Express, told PYMNTS, noting that fundamental to the promise of virtual cards is their ability to deliver enhanced fraud protection, automation and flexibility compared to traditional methods, such as checks — three qualities that resonate strongly.

“They are dynamic digital payment methods that deliver better fraud protection and enable greater spend controls [than legacy B2B payments]. At their core, virtual cards provide businesses with flexibility, security and efficiency,” Chaoui said.

Keo World is expanding access to its B2B payments platform Workeo in Brazil through a partnership agreement with investment bank BTG Pactual Bank S.A. This partnership will help medium and large businesses in Brazil digitize their B2B invoice payments with Keo’s Workeo solution, in collaboration with the Amex Business Link platform, Keo said Monday (Dec. 16).

Embracing Emerging Technologies

Despite the clear benefits of digitization, legacy systems and processes remain significant hurdles.

It’s known that old systems can create big problems, and organizations are grappling with the dual challenges of their legacy infrastructure and rapidly evolving technological demands to operate. With the news that London’s Metropolitan Police is eyeing a sweeping upgrade of its core operational and financial systems, per a recent procurement request, PYMNTS looked into how the sheer scale and complexity of the requirements provide a window into the broader challenges of digital transformation in legacy-heavy organization.

“The middle to back office, they’re no longer just a cost center,” Meghan Oakes, vice president of customer success at FIS, told PYMNTS this week. “They’re a value-added partner for everybody within the business. There are many different aspects of that middle to back office that are now at the forefront of how companies operate.”

“Clients cannot boil the ocean,” she added. “They fully understand that it’s a transformation journey.”

For finance teams, PYMNTS covered on Tuesday, technologies like artificial intelligence (AI) and blockchain are no longer on the horizon — they’re here, and they’re ready to transform the way businesses operate in a world where traditional tools and manual processes are increasingly proving they just don’t cut it.

After all, OpenAI’s latest update for ChatGPT is taking aim at business workflows, while Basis on Tuesday (Dec. 17) raised $34 million in a Series A round to expand its deployment of artificial intelligence (AI) agents designed to help accountants.

Also on Tuesday,  Parafin raised $100 million in a Series C funding round to grow its embedded finance infrastructure that powers financial services for marketplaces, vertical software-as-a-service (SaaS) providers and payment platforms.

And, lastly, are B2B wearables on the horizon for 2025? Only time will tell.

For all PYMNTS B2B coverage, subscribe to the daily B2B Newsletter.

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