July 20179 tions still conducted in cash to-day, businesses are hard pressed to change the way they transact because of cash's wide acceptance across business net-works. Businesses may also be reluctant to start the digitization process simply because they lack the understanding or guidance to implement such changes. They're also concerned about the investment in time and re-sources to facilitate an operational change and feel ill-equipped to do so. Firstly, there is the issue of the supplier network; a key hurdle for many businesses in their journey to digitize payments. Although many companies are keen to pay their suppliers digitally, many suppliers lack the resources and capability to process digital payments. According to a study by Ardent Partners, 46 percent of suppliers believe they cannot afford to convert to electronic payments, 30 percent feel they lack the guidance and capabilities to do so, and 22 percent of suppliers said do not have the managerial structures required to implement the changes needed for electronic payments.These pain points suggest that digital payment systems cannot be implemented in silos. For digitized payments to have strategic impact on businesses, strong collaboration is needed from key industry partners, and a sound execution plan with clear business goals and objectives. It will also require educating suppliers to help them harness the potential power.How can Businesses Reap the Benefits of Electronic Transactions?We recently partnered with a leading card issuer to provide a Virtual Card solution for a local supply packing service firm operating in Australia and New Zealand. Aiming to extend supplier payment terms and eliminate opportunities for payment fraud from its payments process, the supply firm worked closely with its issuer to devise a robust plan, establish the right governance structure and track the progress. To achieve its fraud-elimination goal, the supply firm employed Mastercard in Control and worked together to develop a solution that limited spend to the particular supplier and merchant. An onboarding program was held to educate the supply packing firm's own clients on optimizing digital payments. During the program, analysis of the accounts payable data found that nearly 60 percent of suppliers in scope for the initial deployment (suppliers with less than $500,000 spend per annum) were already accepting card payments on the Mastercard network. With this data, the customer and the issuer developed a program that would help them qualify suitability based on existing payment terms as well as insights from the relevant category managers, significantly improving their working capital strategies. The issuer also developed communication toolkits and reached out to the nominated suppliers to bring them onto the program. To ensure these suppliers were fully on-board, Mastercard and the issuer also provided points of contact to help them address any queries.This collaboration was a successful one for all stakeholders. The local customer saw an extension of supplier terms of 30 days on average and received positive responses from many of its own suppliers. Its success also encouraged the local customer's suppliers to start employing the Virtual Card solution for their own suppliers.Thanks to constant innovation, electronic transactions clearly outpace cash in helping businesses grow and scale. However, strong collaboration and a solid foundation are required to harness its promise. Businesses looking to begin digitizing its payments process should do so sooner, rather than later, in order to harness the cost and time savings that are possible. As Asia Pacific's technological infrastructure develops, it won't be long before the widespread adoption of digital B2B payments takes off. ELECTRONIC TRANSACTIONS CLEARLY OUTPACE CASH IN HELPING BUSINESSES GROW AND SCALE
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