Is Blockchain the Future of Real-Time B2B Payments?

A digital transformation is sweeping across the B2B payments ecosystem.

PYMNTS recently sat down with Gary A. Vecchiarelli, CPA, CFO at CleanSpark, to talk about the business-to-business (B2B) evolutions in play, and how he sees B2B crypto as payments representing the spear-tip of industry innovation.

“It’s an extra step when paying with crypto,” Vecchiarelli says, “but the benefits outweigh that.”

Near-instantaneous, or real-time payments (RTP) across the blockchain cost businesses less to process than wiring funds, as well as take significantly less time than waiting for ACH payments to come through.

“The transit is without a doubt better than the current banking system,” Vecchiarelli tells PYMNTS. “I push a button and get the crypto, get the confirmation, it’s just as easy as that.”

Need for Greater Utilization

B2B technology has rapidly advanced in recent years, but a business is only as efficient as its vendor network and the tech stack of its partners. As a result, many organizations making investments in their processes and systems still find themselves dealing at times with the same old problems.

Headaches on either side of a B2B transaction generally result from asymmetries between the preferred payment methods as well as operational friction around the integration of those receivables.

Vecchiarelli sees tools being developed to provide different payment methods across all-in-one dashboards as a natural evolution. “It will be — it already is — most efficient for a company to be able to go to one dashboard and pay multiple bills using one or more methods. I’m very excited about what solutions are going to come out in the next year or two. I see tools being developed that will be able to provide different payment methods which will involve crypto. Absolutely.”

The flexibility to use preferred payments, on both sides of the transaction, is a fundamental value proposition to all-in-one platforms.

Vecchiarelli tells PYMNTS he sees the biggest impediment to using crypto for B2B payments is that digital asset utilization across the business landscape, as it currently stands, is pretty shallow.

Given the turmoil sending shocks through the crypto industry after the collapse of FTX, it makes sense that CFOs might look askance at relying on using the alternative asset class for something as important as their organizations’ payments processes.

“I think with recent events, there might be a bit more of a ‘monkey-see, monkey-do’ situation surrounding [the adoption of crypto payments],” Vecchiarelli says. “People are going to wait for someone else to do it first.”

Establishing Trust

There are risks around crypto that need to be addressed in order for its adoption to trickle down from the avant-garde to, well, let’s say the cavalry.

“My personal opinion is that there’s a big parallel between these 20,000 crypto coins and the dot-com era,” Vecchiarelli tells PYMNTS. “At the end of the day, it’s a competition over which coins will survive. There isn’t wide enough adoption in trust in many of them, particularly if they are not decentralized. Unless all 20,000 can make a true case for their utilization, we’re likely just looking at bitcoin and ethereum that, from a business and operational, even fiduciary, standpoint, make sense.”

Most Main Street businesses operate in standard-risk environments, buttressed by know-your-customer processes and long-standing controls. Crypto has none of that.

“The industry isn’t regulated yet,” Vecchiarelli says. “As a CFO, we walk this line of either having very robust controls and risk assessments or trying to operate quickly — you need to strike that productive balance between compliance requirements and business needs.”

B2B blockchain transactions, at least those using decentralized cryptocurrencies, add transparency and accountability to the payment process, he adds. Saying, “Even with the auditors, they can also go and verify transactions independently. As blockchain and the technologies built on it become more commonplace and utilized, our internal controls, policies, and procedures will have to evolve to take advantage of those improvements and enhance the quality and strength of our business operations and dealings.”

It is an exciting time for CFOs as operational processes increasingly consolidate into convenient dashboards. A new era of payment-focused technology is being built, both on the blockchain and off, and an array of opportunities exist for executives to take advantage of as they look to grow, evolve, and eventually transform their businesses.

How Consumers Pay Online With Stored Credentials
Convenience drives some consumers to store their payment credentials with merchants, while security concerns give other customers pause. For “How We Pay Digitally: Stored Credentials Edition,” a collaboration with Amazon Web Services, PYMNTS surveyed 2,102 U.S. consumers to analyze consumers’ dilemma and reveal how merchants can win over holdouts.