Archaic payment processes costing SMEs time and money

While digital payments have become commonplace in consumer transactions, many SMEs in Australia continue to rely on traditional banking methods such as electronic funds transfers (EFTs) and manual invoicing processes, limiting their ability to access working capital benefits and operational efficiency.

The persistence of traditional payment methods comes as businesses face increasing pressure from rising costs, tighter margins and ongoing economic uncertainty. For many organisations, managing cash flow remains one of the most significant operational challenges.

However, many business owners are unaware of the flexibility now available through payment platforms, particularly when it comes to supplier payments.

A common misconception is that businesses can only use credit cards when suppliers directly accept card payments. Payment platforms can enable businesses to pay suppliers via card while the supplier receives funds through bank transfer.

The approach allows businesses to extend payment terms through the interest-free period offered by business credit cards, helping preserve working capital without delaying supplier payments, according to Jane Grant, Chief of B2Bpay at Zenith Payments.

"That's a huge opportunity to earn loyalty points but also improve your cash flow," Grant said.

"You can use a card, make use of those interest-free days, and extend those billing terms on your terms."

There's also significant room for improvement on the accounts receivable side of small and medium Aussie businesses.

A lot of Australian organisations still include bank account and BSB details on invoices and wait for customers to initiate manual payments, when modern payment platforms can provide integrated payment links that allow customers to complete transactions directly from digital invoices.

This shift not only provides convenience, but can also reduce security risks associated with sharing banking information through paper or digital invoices.

But these challenges are not only limited to the nation's SMEs, as larger companies continue to struggle with outdated payment processes and compliance issues.

The company works with a range of larger institutions, including private schools and enterprise customers, many of which are still modernising how they receive payments.

Some organisations still store sensitive payment information in a way that may create compliance risks, despite increasing awareness around payment security requirements and PCI compliance standards.

In a couple of memorable cases, businesses have retained almost comical manual processes.

"We've had some businesses where it's in the top drawer with credit card numbers and they're inputting them into an EFTPOS machine," Grant said.

As competition in the payments sector intensifies, the company measures its own performance primarily through transaction activity rather than customer acquisition alone.

B2Bpay also closely tracks customer engagement metrics, including the frequency with which businesses return to the platform to make payments.

Many customers initially use the service for large recurring expenses such as Business Activity Statement (BAS) obligations or tax payments. 

However, its goal is to become embedded in day-to-day financial workflows, with integrations with accounting platforms like Xero, QuickBooks and MYOB central to that strategy.

By connecting directly with accounting software, businesses can automatically view outstanding bills within the B2Bpay platform and choose how they wish to make payments.

Beyond transaction metrics, customer satisfaction scores and online reviews are also tracked. Maintaining positive ratings can be particularly challenging in financial services, where review platforms often become channels for customers to vent their spleen.

There are very few industries AI has not touched in the modern economy, and banking and finance is no exception. 

Automation is becoming an increasingly important part of the company's technology strategy.

Like many organisations across the sector, it sees fraud detection and prevention as one of the most immediate applications for AI.

Traditional fraud monitoring systems often rely on identifying known patterns and historical incidents. 

Now, AI systems can detect unusual behaviour and anomalies before those patterns have been formally recognised.

However, Grant acknowledges that cybercriminals and fraudsters are also gaining access to increasingly sophisticated AI tools.

The growing use of generative AI has heightened concerns across the industry about invoice fraud, phishing attacks and other forms of financial crime that can be enhanced through automation.

"AI can identify, 'this is abnormal,' rather than us having to experience that fraud event, to then build that into our fraud detection system," Grant said.

"But fraudsters have access to AI, too. We've just got to make sure we use it at a faster pace."

Outside security, AI is also accelerating product development and marketing activities.

Tools, including AI-powered coding assistants and prototyping platforms, are helping teams develop and test new product concepts more quickly than traditional workflows allowed.

Where product managers previously relied on wireframes or written specifications, AI can now generate working prototypes that can be reviewed before reaching development teams.

The result is faster product iteration and reduced development bottlenecks.

Marketing teams are also leveraging AI to create campaign content more efficiently and personalise customer communications at scale.

Despite the growing enthusiasm surrounding AI, Grant remains pragmatic.

While the revolution may have been falsely prophesised, automation will primarily be used as a tool to augment human workflows.

"AI is a lot more about improving workflows and saving admin rather than this revolutionary advance that some people are claiming it to be," she said.