Internet B-To-B Payments The Next Big Thing For BanksInternet B-To-B Payments The Next Big Thing For Banks

Electronic data interchange just isn't hip anymore, and financial institutions serving business customers need to get moving on Internet-based business-to-business payment-processing capabilities soon if they want to stay in tune with their customers. That's according to a report released this week by Meridien Research, an analyst firm focusing on technology for the financial services industry.

Payments are a relatively wide-open area within business processing automation efforts, and gaining momentum in the current economic climate, says Jeanne Capachin, senior analyst with Meridien. "Businesses are focusing internally at how to cut costs as revenues aren't growing," says Capachin. While businesses were trying to automate internal processes during the strong economy, shifting from EDI to Web-based payments is one of the hardest elements of automation--so it's been saved for last.

For financial institutions, the payments market means more than sending money from one company to another over the Internet, according to the report. The service should increase the financial institution's involvement in the procurement process and thereby inspire higher transaction volumes and an increase in fee-based revenues. B-to-B payments can help the institutions get a clearer picture of client's receivables--thereby allowing for more informed credit decisions.

Investing in Internet-based B-to-B payments should be the next step for any financial institution, especially those with expertise in financial EDI, says the report. Those institutions already have a payment-centric relationship with clients, but if they don't make the investment in procurement technologies now, they could lose those clients to a more Internet-ready competitor.