Change is inevitable, and companies that initiate change have the best opportunity to manage it.
That's why it's important to embrace payment modernization. important This is important for organizations, especially in a future where payments are increasingly digital, instant, and secure, no matter where you sit.
“One of the most exciting things about the payments industry is the speed of innovation.” Sobos chief technology officer Eric Lefebvre He spoke to PYMNTS in the series “Next Steps in Payments: Modernizing Payments.”
“New technology is generally easier to implement and scale than older technology,” Lefebvre said, noting that the adoption curve is: lots of New payment methods have declined.
He highlighted the “consumerization of IT” as a key trend, with the seamless experience provided by devices such as the iPhone raising the bar for enterprise applications and services.
As the world of commerce moves into the future, payments modernization is emerging as more than just a pillar of growth or competitiveness. necessity, However, as a government-mandated operational reality.
Four pillars of payment modernization
Lefebvre identified four Selection subjects Factors driving the need for payments modernization.
First, accelerating B2B commerce Is required Transitioning from traditional overnight batch processing to real-time payments, a transition supported by innovations such as: clearing house's RTP® network And that FedNow® Service. The move to immediacy also facilitates automation of accounts payable and receivable within enterprise resource planning (ERP) systems, increasing efficiency for B2B departments.
Second, the B2C and peer-to-peer payments space has evolved from digital wallets and non-card bank payments to platforms such as: apple cash and Zell, Rapidly expand your payments ecosystem. Within existing rails and beyond, At the same time, it creates a mosaic of options for consumers and businesses alike.
The third factor is the emergence of new norms. It aims to fight fraud, close tax gaps and protect. Account owner. These include ISO 20022, Open Banking Requirements, GDPR and I.R.S.Introduction to iris electronic filing All of these require investment and are driving the digital transformation of payments.
Finally, Mr. Lefebvre pointed out the architectural limitations of traditional banking core systems, which are built on outdated architectures, making it difficult to adapt to market demands and integrate new technologies at the required pace. I pointed out that there is.a contradiction It emphasizes the need for modernization efforts.
“At some point, the forcing feature will come out and those who can get to faster single speeds will win out over the laggards who are still riding two-speed models,” he explained. “The thing about technology is that as soon as you introduce the product, the technology debt timer starts.”
Navigate the ever-evolving landscape of payments modernization
As companies navigate the complexities of operating across multiple jurisdictions, the integration of ERP systems, tax compliance requirements, and payment methods will form the next stage of payments modernization.
Against this backdrop, Lefebvre has developed a balanced technology and product roadmap that addresses business as usual, security, technical debt, and new feature development to ensure sustainable growth and compliance. emphasized the importance of maintaining
As governments increasingly influence the payments landscape through mandates and regulations, Mr. Lefebvre emphasized the need for alignment with tax compliance and regulatory requirements, as well as the introduction of interoperable frameworks.
Our efforts to modernize payments have the following characteristics: both By embracing technological advances, forging strategic partnerships, and prioritizing tax compliance to address challenges and opportunities, companies can navigate this dynamic landscape and forge new paths for growth and efficiency. can do.
Looking ahead, Lefebvre said he envisions opportunities arising from the constant pace of innovation, especially for multinational companies.
“Consumer technology continues to evolve, but I think the next horizon over the next five years is really B2B and driving those changes…This is the calm before the storm,” he said. said. “In the next five to six years, [are] This will be a major transformation challenge for distributors of major manufacturers. it is We operate in multiple countries because it's difficult enough from a tax perspective to do business in the United States, which is actually 50 countries. Every country is unique. Payment methods, compliance environments, ERP, automation sophistication, and payment modernization play a role. ”
For all of our PYMNTS B2B coverage, subscribe to our daily subscription. B2B Newsletter.
