Today’s digital era requires businesses to be agile; transforming legacy payments systems is an essential pillar to build capabilities and efficiency across the organization. What are legacy payment systems? These are monolithic blocks comprising of different systems hardwired together in a way that decoupling them has become next to impossible. This makes it difficult to replace or upgrade these systems, and any efforts to update will require a complete system overhaul.
In order to maintain competitiveness and relevance, businesses need a digital payments architecture that is cloud-based to meet the new age speed, scalability, and flexibility requirements. However, migrating to the cloud is no easy task, especially for businesses that are still running on legacy technology.
These businesses should consider making their payment processing streamlined, faster, and free of manual effort, using the help of automation. Payment automation tools add tremendous value to operations; they improve and optimize manual payment procedures including processing and matching invoices, verification of fund transfers, and automatically approving and sending payments.
Emerging technologies and the infusion of Artificial Intelligence (AI), Machine Learning (ML), and Robotic Process Automation (RPA) within payment processes have been seen supporting businesses in simplifying reconciliation between Accounts Payables (APs) and Accounts Receivables (ARs). Companies that are still dependent on manual processes take 67% more time to follow up overdue payments than those that automate their AR processes.
Fortunately, relief is readily available; with automation solutions in the cloud, businesses can catch up to current trends and transform their payments capabilities in a matter of days. Don’t just take our word for it, there’s research to back our claims. In a recent survey, 79% of business respondents indicated that automation allowed them to improve team efficiency, and 75% said that it helped them provide superior customer experiences- a striking number indicating the wheels of automation adoption are in full motion.
Benefits of Payment Process Automation
There are quite a few wins that payment processing automation can unlock, with the key ones including:
- Faster money movement: Real-time payments processing is crucial for any business, particularly for AP/AR. As evident in a survey, 87% of firms have faster processing with AR process automation. In fact, 68% of companies are evaluating the feasibility of available technologies to enhance their payments processing speeds.
- Reduced transaction costs: Automation lowers the average cost to process an invoice by as much as 80%. While the cost cut may not be drastic for single transactions, the cumulative savings for hundreds or thousands of transactions can be huge.
- Fraud protection: 80% of organizations report being targets of a payment fraud attack. Payable automation reduces the number of paper based checks where the likelihood of fraud is higher as compared to automated fund transfers. Also, payables automation helps reduce fraudulent invoice payments by matching invoices that align with corresponding purchase orders.
- Reduced errors: Automation leads to less human involvement, consequently reducing the likelihood of manual errors and inefficiencies. Chances of duplicate payments, input errors, missed payments, etc. are eliminated by leveraging automation tools.
It’s time for companies to shift their focus and embrace digital transformation as inevitable; upgrading or replacing core payment platforms is a pivotal step towards meeting mission-critical objectives, though it can be expensive, and time-consuming. This is why many businesses with legacy tech continue working with outdated payments capabilities, exposing themselves to many risks and costs. However, ultimately the pros outweigh the cons; leveraging automation can help them reduce process and system inefficiencies, and decrease manual human intervention.
One key element to remember is that transformation is not simple; businesses that undertook automation projects independently have encountered various obstacles along the way. Many times automation projects start with a small use case but later turn into large-scale transformational projects spread across different functions and domains. This means the stress of going over budget and anticipated timelines, all while having to dedicate additional resources to maintain a legacy payment system simultaneously.
Instead, businesses should consider simplifying the core systems with a payment partner that can work with their legacy tech stack and still offer the benefits of seamless payments. Nium does exactly that; its payment platform connects to businesses using an application programming interface (API), and is already infused with the latest automation tools – AI, ML, RPA, etc. The result? Digitized payment processes that moves money faster for clients. Nium’s platform delivers the payment automation benefits without any cost of implementation, thus helping clients in transforming their payments capabilities effortlessly.