The Journey to Zero: How Paystand is Changing B2B Payments
Of the myriad problems facing businesses today, one over-arching challenge dominates all else: the B2B financial system remains essentially unchanged since the middle of the 20th century. At its core exists a fee-based transaction model for payments that no longer meets the needs of modern, digital-first businesses.
The DNA of the enterprise has gone digital. Yet, the lifeblood of a company -- Finance and Revenue -- remain saddled with pre-internet process and systems. It’s no wonder businesses are scrambling to change and why finance teams are often seen as the bottleneck in company growth. That must change.
Today's payment infrastructure was built with archaic principles and pre-internet vision, using a model that counts on intermediaries and gatekeepers who profit from charging fees to move money from one company to another. It's basically covering an old system in a digital coat that complicates matters further by adding extra steps to the process in a platform with little visibility.
Finance teams in every business are trusted with crucial tasks for the company's survival: managing revenue, handling accounts receivables for steady cash flow, watching expenses, and keeping the company operating smoothly. However, they have to deal with all sorts of obstacles, such as highly manual processes prone to error, which lead to failed payments and hours of wasted time on data entry. In fact, the average business loses up to 25% of revenue due to poor billing and collections practices.
The industry needs to do better. We must improve the payment infrastructure, experience, and business model for the sake of the entire B2B economy.
A New Approach: Payments-As-A-Service
These huge inefficiencies in the financial system were the genesis of Paystand's Payments-as-a-service-model (Paas). A fresh approach to commercial finances that moves payments to a cloud-based system helps automate back-office accounting processes. Every movement is made without charging fees based on the volume of the transaction. Instead, subscribers pay a flat monthly rate to use Paystand's networks.
Once the Payments-as-a-service model was set in place, we leveraged our newly created zero-fee banking network to create an ecosystem of financial products that would allow our users to step into a new era of B2B finances, completely digital, with zero fees and with an open industry approach that favors transparency between merchants and banks.
Over the past year, we've made significant progress on our mission of building a better payments infrastructure and helping businesses break free of the legacy payment model. It's something we call The Journey to Zero: eliminating transaction fees (#NoFees), eliminating manual processes (#NoPaper), and eliminating gatekeepers from the financial system (#OpenIndustry).
Bringing The Journey To Zero To Life
Over 200,000 businesses are now paying over the Paystand Bank Network and we're seeing more and more adoption of finance and payment automation from B2B companies. Let's take a look at several significant features and benefits of the Journey to Zero.
The New Banking Network
Instead of delayed, insecure, and costly payment methods, companies using Paystand realize revenue faster, improve margins, eliminate transaction fees, and provide a seamless payment experience to their customers. Today, thousands of businesses pay over the Paystand Bank Network, saving millions of dollars in transaction fees while cutting DSO (Days Sales Outstanding) by over 60% on average
We've seen the adoption of this new banking network grow each year. In 2020 we launched a new feature: Payer Incentives. Now, any merchant can incentivize their customer to pay via the Paystand Bank Network - our zero-fee, secure, fund-verified bank-to-bank payment network. Choose to either discount the invoice a small percentage or offer immediate cashback to your customer. You get to keep more of your money, your customer gets a better price, and no one pays transaction fees. Everyone wins.
We launched our own approach to enterprise blockchains to add greater security to the Paystand Bank Network. The blockchain creates a record for every transaction we process. That record can't be altered in any way, assuring transactions are valid and free of tampering. It's a benefit only our customers have enjoyed using our zero-fee network. We call it Payment Assurety.
But payments were just the beginning. We believe that companies in other sectors and the world can benefit from a more open, secure, and verifiable system. You can use Assurety-as-a-Service to confirm any event, action, or identity in real-time. Our users now have an accurate way to prevent fraud and forgery.
Zero Card: The New Card for Corporate Expenses
Virtual card adoption is expected to surpass $5 trillion in transaction value by 2025. It was natural Paystand created a virtual expense card that leverages Paystand's zero-fee payment network to give businesses a fast, secure way to eliminate the cost of transaction fees.
The Zero Card is a prepaid virtual expense card that companies can issue to employees to make purchases online and over the phone securely. It works the same way as physical cards, except it requires no credit checks, and businesses can issue and deactivate these 16-digit card numbers in just a few clicks. Check it out here
Smart Lockbox and eChecks
An electronic lockbox service replaces the physical address of a traditional lockbox with a digital web address. It replaces paper checks with electronic forms of payments such as eChecks, ACH, debit cards, credit cards, and electronic bank transfers.
This can allow our users to move their entire check workflow into Paystand's zero-fee banking network, streamlining collections, and drastically reducing paper usage for B2B payments. This is a great tool to start transitioning from traditional methods to digital ones, proving to merchants every process has room to be improved and benefit their financial state since they can reduce DSO by 60% and manual labor by 70%. All the more reasons to start the Journey to Zero.
Most of our customers use ERPs to manage their everyday finances. From systems like Quickbooks to NetSuite, Paystand has an integration for automating the AR lifecycle in one place: from invoicing to reconciling payments instantly. It is now easier than ever to forgo transaction and interchange fees while cutting down on costly, lengthy paper processes in accounting teams. You can actually have it all: A safe and better way to transact, centralized information, and improved AR processes.
Paystand for Platforms
The Paystand platform also provides marketplaces and software companies an entirely native payment option. Paystand gives those marketplaces the ability to create new revenue streams and monetize payments -- something impossible in other models by accessing fully-open APIs that keep the payment experience within their own platform.
Start Your Journey to Zero
If our mission of rebooting commercial finance and creating an open, digital infrastructure for B2B payments resonates with you, get in touch with us. We can talk you through the best solutions for your company with #NoFees, #NoPaper, and #OpenIndustry.