Can SAP Keep Pace with the Digital Payments Revolution?

  • Pat Bermingham, CEO at Adflex

  • 30.04.2020 11:15 am
  • payments
  • 566

SAP’s corporate factsheet boasts that 77% of the world’s transaction revenue touches a SAP system. That’s a lot of payments. Its ERP platform and digital supply chain solutions ‘help companies of every size and industry manage their supply chains digitally.’

Like so many others, SAP is talking up the importance of using cloud and digital technologies to improve the customer experience. Yet from a digital payments perspective, even SAP’s latest and much-vaunted ‘cloud and any-premise’ platform, S/4HANA, falls somewhat short. What’s more, the word on the street (at the most recent UKISUG SAP User Conference) is that migrations to S/4HANA are moving far slower than anticipated, with myriad enterprise users opting to continue, for now, on SAP’s legacy ECC system.

A hidden market for payments

All this adds up to an important point: that a big and underserved digital payments market will continue to exist among SAP-using supply-chain enterprises, both before and after S/4HANA migrations are performed. And with SAP not sunsetting its ECC version until 2025, demand from that market is set to intensify as more enterprises cotton on to the flexibility and efficiency benefits that digital payments can deliver.

While platform migrations of the ECC to S/4HANA scale are rarely greeted with enthusiasm, it’s fair to say that the new system does bring serious benefits, including more efficient shared services and accelerated financial closing, both of which will support a better user experience.

Integrated payments are rarely found within SAP

While the market is saturated with SAP ‘connectors’ for HR, sales and reporting functions, there is little on offer in the way of third-party support for payments and invoicing.

One reason for this is that payments modules are tough to integrate with ERP systems. But as digital payments have proliferated they have become better regulated, and have stimulated the development of APIs that now enable new configurations and payment options. Cloud-based APIs from specialist developers, in particular, have recently made the business of integrating payments into SAP far simpler than in years gone by.

Another factor inhibiting SAP payments integration has been the SAP platform itself, which hasn’t provided any form of secure connection to a payments gateway. This has forced merchants to perform lengthy manual payment acceptance processes, which are inefficient, costly and vulnerable to human error and fraud. Again, this barrier has now been lifted; SAP-supporting payments integrators now provide a secure pathway to a payment gateway from within SAP’s environment.

Operational efficiency is SAP’s game, and is achieved incrementally as more business processes get integrated into the system. With the treasury and finance departments being such a powerfully enabling force in enterprise businesses, bringing the payments capability into the fold is a big deal.  

Payments for all card types, including level 3 purchasing cards, can now be integrated into SAP, increasing efficiency and lowering costs. In fact, the payment process itself can now be controlled entirely within SAP, through an ERP connector, further streamlining the process. The arrival of acquirer-agnostic SAP payments connectors has removed the need for merchants to be tied to their banks. This means merchants can now configure unlimited acquirer accounts and secure more freedom and control over acquirer relationships.

The future of SAP-integrated payments

HANA’s focus on deeper functionality and improved user experiences will support SAP-using businesses in their journey to becoming truly intelligent enterprises, where administrative processes happen efficiently and autonomously, and a wealth of data and analytics is provided to decision makers to enable better financial decisions. To reach this lofty goal, however, all departments will need to commit to digital integration. It’s encouraging to see that, in SAP’s world at least, the vital enterprise payments function isn’t falling behind.

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