San Francisco, CA, USA
January 11, 2007Crossing
Frontiers in Business-to-Business Electronic Payments
Report Published by Celent
The migration to electronic payments for
B2B transactions has been far from a gold rush. Nevertheless, the frontier
shows promise and more pioneers are willing to blaze a trail. As a result,
Celent predicts that B2B e-payments will pass the halfway adoption mark by
2012.
In a new report, Crossing Frontiers in
Business-to-Business Electronic Payments, Celent discusses the good
news and the bad news in the e-payments migration story. The good news is
that companies are increasing their use of e-payments. The slope of the
business-to-business e-payments adoption curve is steepening. By 2012, the
scale will tip in favor of e-payments, with their share of transaction
volume reaching over half. The bad news is that the pace is extremely
slow, encumbered by manual processes, legacy systems, proprietary formats,
and other priorities.
A triumvirate of pioneers is required to
cross the frontier, including banks, companies, and technology providers.
“While banks have historically played the lead wagon role in developing
payment systems and have consequently molded them to fit their needs, they
are now sharing the reins. Next generation payment systems are being
structured with companies’ needs in mind and will be influenced by
technology providers, consortiums, and payment networks,” says Alenka
Grealish, author of the report and manager of the Banking group at
Celent.
Through extensive interviews with pioneers,
Celent distills their key traits and discusses the reasons that e-payment
adoption will continue to march forward. Companies that are frontiersmen
share several traits: first and foremost, a willingness to change; second,
a desire to alleviate the pain either at the operational and/or financial
level caused by manual processes and paper checks; and third, a desire to
add a revenue stream to a cost center. “Any discussion around adoption
of e-payments must be begin with an examination of the changes required by
companies, not only technological, but also organizational and
process-related,” comments Grealish.
Trailblazing banks are break three daunting
trails: lowering costs through a technological overhaul, raising revenue
through innovative value-added services, and break-downing organizational
silos, which choke investment in enterprise level infrastructure and
cross-fertilization. “Only a half a dozen global banks will end up being
both scale players and consequently innovators. At the national level, a
handful of banks will stand out as adding significant value beyond
transaction processing,” Grealish concludes.
The report is 54 pages and contains 25
figures and three tables.
A table of
contents is available online.
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