An Insider on Why the Tech Industry Is Ripe for B2B Consumerization

PYMNTS interviews Matt Wegner, vice president of global payments & risk at Adobe, about how the technology industry is perfectly poised to move B2B payments toward a consumer model of technology and service.

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In a world where consumer payments’ evolution is moving at the speed of light, B2B payments often still follow longstanding traditions. The use of legacy B2B payments and processes seems out of place in the technology industry, but Wegner said that even large tech firms are no strangers to it — and, in fact, may be some of its biggest fans.

“I think part of the problem is large companies take a long time to change,” he said. “They’ve got [engrained] processes, some of them for good reasons, like controls to make sure that money’s not moving freely. There’s a lot of control in big companies over their procurement shops.”

The resulting B2B payment complications can be daunting. Wegner explained that inside a large company, the process not only for sending payments but also for everything that happens prior to it is highly complicated, with multiple stakeholders, levels of approval or even portals required. That makes for many potential speed bumps.

“How to approve [a payment], if it’s approved, what you need when it gets rejected, how to deal with the rejection, invoice generation, reconciliation, errors, delays, overhead — I think all those things, for better or worse, add to the complexity of why B2B payments haven’t moved as quickly as consumer payments, where it’s fast, simple and easy.”

The nature of technology itself, however, makes the industry the perfect vehicle for driving B2B consumerization. Wegner said the tech space as a whole knows from developing consumer products that not having a customer-centric solution places a business at risk of losing those customers. He said the industry’s approach to consumers must be applied to its business customers, too.

“On the consumer side, stuff changes very quickly and if you don’t change with it, you lose your customer and you lose your revenue,” he said. “I think that things with technology are moving so quickly that some of that risk probably starts coming into the B2B arena.”

Small companies and vendors are likely to turn the tide in favor of a B2B payments revolution. Wegner noted that the pandemic hit a lot of small to midsized businesses (SMBs) extremely hard, and there are still SMBs that are heavily dependent on cash flow to make their models work. Large companies’ complex B2B processes can pose high hurdles for these small players.

“[Small companies] maybe don’t have really deep pockets and large bank accounts, so they’re highly dependent on that money coming in,” he said. “If big companies don’t change the way they operate, the smaller companies that buy their services or do business with them and are trying to get paid quickly may go to a different solution provider because they can get the money same-day versus net 45 or net 60 days.”

B2B payments innovation offers a prime opportunity for third-party disruptors. Wegner said he thinks that to make a dent in the problem, a lot of large companies everywhere in the world need to move together and make the same changes — something that is difficult for them to achieve on their own. This makes B2B payments innovation a ripe opportunity for third-party disruptors.

“I think a third-party solution provider that’s innovative, disruptive and leveraging technology can make it easier for large merchants and small merchants to all get there together,” he said.

Self-service portals are a crucial step in the right direction. Like any large company, Wegner said, Adobe has a massive AR shop and a lot of policy and process, but one brilliant solution the company has launched is a self-service portal. Anyone who owes money to Adobe or vice versa can log in to this portal and see the details of the transaction and the payment terms. It also allows B2B buyers to pay Adobe through a credit card.

“I found in my personal life as a consumer, sometimes the best service you can get is self-service. I’m never disappointed with the service I provide when the right information tools are made available to me, and that’s what Adobe is trying to put in front of our accounts receivable shop.”

Consumerization of the B2B equation is inevitable. What the B2B payments problem ultimately boils down to is finding ways to strengthen business relationships, Wegner said. That makes innovation inevitable. Customer-centric solutions succeed by bringing empathy into play.

“If you can understand the pain points of your business partners and figure out ways to solve them, I think you build a longer-term relationship in the B2B space,” he said. “I think we’re starting to move closer and closer to what I would call a faster, better, customer-centric solution for B2B payments. But we’ve got a long way to go.”

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