I spent an interesting few days in Las Vegas last month at Money 20/20, the giant fintech meet-up where I was a panelist for a session on B2B payments, and at the Institute of Financial Management’s AP and P2P conference, where I gave a talk on cross-border supplier payments.
These two events could not be more different. If you drew a Venn diagram of the audience for each, there would only be a tiny sliver of overlap. That sliver would include those interested in B2B payments, as evidenced by me cabbing up and down the strip between The Venetian and Caesar’s Palace.
Money 20/20 bills itself as “the largest global event focused on payments and financial services innovation” and this year packed The Venetian with 10,000 attendees. It was a Who’s Who of FinTech entrepreneurs, investors, techies, and men in sleek European cut suits talking on their cell phones. The exhibition halls were loaded with technology demos and marketing hype.
The IOFM event over at Caesar’s drew about 500 AP practitioners working on various certifications and looking for better ways to do what they’ve done every day for decades: make payments and move money.
These two worlds are about to collide as fintech companies open their eyes and wallets to B2B payments.
A $36 trillion opportunity
For most of its history, fintech, and Money 20/20 has been focused on consumer payments innovation and the resulting disintermediation of retail banks. There’s been very little around B2B payments, which represents a much bigger opportunity—$36 trillion, versus $3-4 trillion for consumer payments. I didn’t attend Money 20/20 in 2013, but a banker friend of mine reported just one B2B session with only about 20 people listening in.
Last year I participated on a B2B payments panel with about 200 people present. This year, I again participated in a panel and over 900 people came to learn more about B2B payments. We were on a big stage with bright lights, it was standing room only, and all of us panelists were mobbed afterwards.
This is indicative of the change that’s happening in the space. Change comes slowly to B2B, but people are now starting to understand the opportunity. There’s a lot of innovation already in place in consumer payments, and it’s hyper-competitive. Companies are duking it out. Prices are falling. It’s getting harder to make money over there. They’re looking over at B2B payments and seeing a huge space that’s still paper-based, with lots of room for competition.
Would anyone like to share a cab?
There’s a growing recognition of the opportunity to add value to the enterprise in B2B payments. For the first time I can recall, I read an analyst commentary saying that payments are going to be the next wave of value for enterprise. I couldn’t agree more. There’s a renewed interest, and banks are looking for ways to work with innovators to get in on the opportunity.
That means change is making its way to the finance and accounting groups on the other end of the strip at Caesar’s. There’s a big opportunity to innovate by removing paper, reducing cost, adding back a rebate, and relieving accounts payable of a whole lot of manual work.
In three years, the landscape is going to be very different than it is today. We probably won’t ever see a lot of folks from IOFM cabbing over to Money 20/20, but I think I’m going to have a lot more company going the other way. We are happy to lead that charge.
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