At the inaugural Wired Money conference Tom Blomfield, founder of online payments start-up GoCardless, declared a long overdue revolution in B2B payments that could leave 90% of accounts teams redundant.
Speaking at the conference in London on Monday, Tom told audiences that business-to-business payments are stuck in the dark ages, whilst payment providers have made consumer payments online instant, convenient and intuitive.
“In the 90s the biggest problem on eBay was transferring money to another person,” says Blomfield. “PayPal innovated around that problem. The same revolution is needed in business-to-business payments.”
With a lack of innovation in online payment and billing, businesses are forced to rely on antiquated payment methods such as cheques. Audiences were shocked to hear that 80% of B2B payments in the US are still made by cheque. Accounts teams are left to contend with a laborious job of sending invoices, chasing late payments and manually reconciling bank accounts. The result is that UK businesses are suffocating under GBP30bn of late payments.
“At GoCardless we want to make business to business payments easy. We do so by making it simple for companies to take Direct Debit payments online, which puts them in control of when they are paid without the need for a merchant account or expensive credit card fees.”
He went on, “By being resolutely data-driven, we’ve built a fully automated payment system. It has helped small to medium sized enterprises such as the Ask Driving Schools reduce their accounting time by 80%, and double in size in just a year. Using GoCardless with their accounting software means Ask don’t have to re-key invoices and receipts. With the right authorisations in place, we make computers do the hard work for us – and can render 90% of accounts teams redundant.”
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