Team eCommerce Next interviewed Mr. Brandon Spear, President, MSTS to get more insights on B2B companies, B2B payments, and their response to COVID. Following is our interview with him:
1) Can you tell me what MSTS does?
At its core, MSTS helps businesses facilitate trade credit programs, creating a seamless B2B payments ecosystem across all sales channels. We’re a global financial technology company, specializing in payment and credit management for B2B companies with a focus across manufacturing and distribution, retail, e-commerce, and marketplaces. Our Credit as a Service solution facilitates B2B payments by extending terms, handling invoicing, and managing collections. MSTS has 40 years of experience underwriting businesses for credit and facilitates $6 billion in transactions annually around the globe.
2) How has the pandemic altered B2B companies?
The effects of COVID-19 have accelerated the adoption of B2B e-commerce. And today’s B2B buyers are demanding a B2C-like purchasing experience when shopping online. But many manufacturers and distributors have inflexible legacy systems—not to mention strained resources and budgets, limiting their ability to offer a frictionless purchasing experience.
3) What are the biggest challenges B2B companies are facing, and how do payments play a role?
Today, many B2B companies’ are facing complexities managing cash flow. They simply can’t afford to have too much working capital tied up in open receivables. During an economic downturn, many companies have reduced, and some have stopped, offering net terms programs entirely. Unfortunately, these programs are often key to retaining loyal customers.
4) I understand you’ve recently announced a relationship with Alibaba, can you tell us more about that?
In June, Alibaba announced Alibaba.com Payment Terms, powered by MSTS. It is the first-ever trade financing solution embedded directly into a cross-border B2B e-commerce marketplace, allowing qualified buyers to order goods and pay for them up to 60 days after they are shipped. Before then, the vast majority of cross-border trade between small businesses required full payment upfront and small businesses could not benefit from the global supply chain financing programs that their larger competitors frequently enjoyed.
5) What does the announcement mean for the industry?
The Alibaba announcement is one of many proof points that B2B marketplaces and suppliers with e-commerce sites are removing the complexity and friction of B2B transactions. In fact, a report we published last year found that 74% of B2B buyers said they would purchase from a competitor if their vendor’s e-commerce store could not keep up with their purchasing expectations. This means buyers want vendors to allow purchases across all sales channels and are flexible enough to enable purchases on terms, with purchase controls intact and adherence to invoicing requirements. In other words, a seamless buying experience creates loyal customers.
6) You brought up this idea of B2B businesses pivoting to a direct-to-customer model. How can this be done? What challenges are ahead for businesses going that route?
As a result of the pandemic and the harrows of receiving on-time payments from retailers, many brands have pivoted to a direct-to-customer model. However, manufacturers are now tasked with breaking the bulk and distributing to thousands, instead of a select few. These companies don’t typically have the resources, workflows, or operations to quickly scale and support purchasing processes to thousands of buyers. As a result, many are turning to partners for help.
7) How are we seeing the B2B space change due to the pandemic versus the B2C?
Despite B2B companies experiencing unparalleled e-commerce growth, creating a frictionless buying experience is often hampered by legacy systems. We are helping many of our new clients create a buyer and seller driven experience to enable a seamless purchasing experience. Many companies are struggling with outdated backend processes. Our new report finds that paper checks and other manual payment methods remain the primary invoice payment method for 25 percent of B2B businesses, with 48 percent saying they send invoices via email, and 18 percent sending invoices via traditional mail. So you have this interesting paradox where online sales may be doing extremely well, but you still need someone to be physically in the office to make sure checks are collected and invoices are completed. For B2B businesses, it’s imperative their payments are efficient and streamlined digitally in order to create a superb experience that keeps customers coming back. In the same way, B2C customers are seeking immediate, virtual payments, merchants and suppliers are looking to reduce order to cash.
About Brandon Spear
Brandon Spear leads MSTS with expertise in managing large, diverse global teams. His strength is discerning and focusing on the most important challenges facing an organization at a particular point in time and unifying all stakeholders behind accomplishing a set of specific goals. Brandon has a unique ability to connect across all levels of an organization, motivate staff with diverse skill sets while ensuring a common alignment and results.
MSTS is a financial technology company, working globally with B2B companies across transportation, manufacturing, retail and eCommerce. MSTS’ Credit as a Service solution accelerates business commerce by streamlining payments and A/R processes. On behalf of its clients, MSTS processes over $6 billion in transactions a year. MSTS, has 40 years of experience underwriting businesses for credit and facilitates transactions for its customers in over 190 countries and territories. For more information, visit https://www.msts.com.