Payment functionality has emerged as the strongest indicator of customer retention in business-to-business (B2B) software.
According to a new study by Worldpay, which polled more than 1,500 businesses across Australia, the UK, and the US that use business management software, 44% reported that they would not switch provider because they were happy with their payment solutions. This suggests that seamless payment integration is now essential for maintaining business customers.
Businesses were also clear about why they would leave their current management platforms, with most reasons relating to stagnation, poor integration or subpar customer experiences. Among those likely to change providers, 32% cited access to newer, more innovative software as a factor, 28% said they spent too much time managing their current solution, and 25% mentioned negative experiences using payment capabilities.
These findings suggest that business customers are evaluating the competitive landscape when selecting a provider, favoring the most innovative, up-to-date and efficient options, that will deliver the best experiences for their own customers.
Further underscoring this point, 26% of businesses expect continuous innovation and upgrades in payments and financial capabilities, and 40% want at least annual upgrades. This highlights how buyers consider consistent platform modernization a prerequisite in the vendor landscape.
Demand for embedded finance on the rise
Businesses were also asked how likely they would be to switch platforms for specific financial capabilities. Large majorities said they would seriously consider moving systems for improvements in cash flow visibility and forecasting (83%), the ability to accept all payment types (82%), the ability to manage outgoing payments (81%), and faster access to funds (81%). These findings make integrated payment solutions as a critical differentiator in modern software selection.
The study found that embedded financial services are already seeing significant usage. Fraud detection and risk management (81%), accounts receivables and payables (80%), and banking and treasury services (78%) ranked as the most frequently used embedded finance capabilities.
However, despite strong interest, several challenges continue to hinder adoption, with many expressing uncertainty regarding effective use. 35% of respondents said they were still learning how to use embedded finance solutions effectively, and 23% said they had not received enough guidance on how to use these solutions effectively. Furthermore, 29% cited technical hurdles, such as integration challenges with existing systems and underlying technological constraints.
Merchants invest in payment orchestration
Results from the Worldpay report corroborate findings from a S&P Global research commissioned by Discover Network. The study found that the vast majority of the businesses polled (93%) agreed that “payments are a highly strategic area of focus for our company that drives significant competitive differentiation.”
As the payment landscape grows more complex, businesses are showing strong interest in payment orchestration systems. 20% of merchants, including 28% of those with 10,000 or more employees, indicated a desire to deepen their expertise in payment orchestration.
Payment orchestration is a centralized technical layer that allows merchants to integrate with multiple payment service providers and gateways through a single connection. This enables businesses to optimize transaction routing, reduce costs, and increase payment success rates.
Payment orchestration also helps merchants address key payment priorities as they grow and expand their operations. In particular, these systems allow merchants to increase acceptance of local and alternative payment methods, a priority cited by 39% of businesses, and improve authorization rates, a priority for 35% overall that increases to 48% for merchants with over 10,000 employees.
Featured image: Edited by Fintech News Australia, based on image by farknot via Magnific
