Change, efficiency and fraud: how payments professionals can help shape a better world

  • Payments
  • 22.07.2020 06:05 pm

Bottomline’s virtual media roundtable, hosted by the company’s Ed Adshead-Grant last month, gave three financial experts the chance to discuss the findings of the Bottomline Business Payments Barometer 2020 and their implications across the UK payments landscape.





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Gavin Maclean, Head of Cash Management and Payment Product, Lloyds Banking Group:

“Making payments fast, transparent, seamless and as free from error as they can be is what we are trying to do. Frankly, consumers wouldn’t accept anything else.”


Dan Bellis, Senior Policy Adviser, the Federation of Small Businesses (FSB):

“There is a plethora of reasons why late payments occur and it is something that we have to get out of to help businesses survive. If we are able to do this it will mean there are more small businesses out there, more jobs for the UK Plc.”


Naresh Aggarwal, Associate Director, the Association of Corporate Treasurers (ACT):

“Payments really are moving away from being a utility function - there is a richness to that interaction with customers, whether it’s B2B or B2C, which can provide a real advantage.”





It was hard to avoid the single subject that has dominated every media channel since early in 2020. COVID-19 was always lurking in the background, providing a context that emphasised the critical importance of what was under discussion: radical changes to the trading environment of just about every UK business; the ongoing challenges involved in combating fraud; and the very real threat posed to countless smaller businesses by the continuing scourge of late payment.


Gavin Maclean from Lloyd’s Bank summed it up: “We now all face unavoidable changes on a scale that I certainly have not seen in my career and I guess many of us have not seen in our lifetime.”


But perhaps these changes were already on their way before the pandemic, driven by regulation, technology and more empowered consumers? When it came to addressing radical change in the trading environment, Maclean for one suspected that COVID-19 is merely speeding up a process that was already both inevitable and necessary. “Businesses right now urgently need to review their processes and the methods used for accepting and making payments,” he said. “I think we are starting to see, through some of the data, that COVID is causing an acceleration of some of the trends that we’ve been used to over the last few years.”


He expects a lasting legacy from this period as businesses urgently address how they are going to run processes and keep cash flowing in a socially distanced world.


As he said, “There is cause for optimism here in the UK. I think we have a great track record of cross-industry collaboration to deliver things that can make a positive difference for businesses. And I think that as we come out of the crisis, we’re all going to be grateful for some of the great payment systems we’ve got and some of the innovations we’ve seen over the last few years.”



Facing up to fraud

The FSB’s Dan Bellis believed that the changes Maclean referred to had a role to play in combatting the fraud statistics highlighted in the Payment Barometer, which showed that 88% of small businesses currently recover less than 50% of the amount they lose to fraud each year. “If we begin to get payment structures correct and in place, and get small businesses actually using them, then we can begin to mitigate the amount that is lost to fraud each year,” he said. It all comes down, he believes, to relationships with the right partners, including banks, payroll providers and other specialists. “That is incredibly helpful for small businesses who are looking to recover that loss.”


But when the conversation turned to the contentious issue of late payment, Bellis was far less positive, saying it can be “devastating” for small businesses. “I was speaking to a small business who sent their invoice in early January. It is now [in March] overdue, and when they chased it they were told they will not be getting paid until the pandemic has subsided.” They were even called “delusional” for expecting to be paid.



A call for transparency

Bellis believes that part of the problem is that the current culture is overly based on self-certification. “We would like to see these payment statistics put in annual reports, so that they go through independent auditors to show what a company’s payment performance is really like. We are looking to big businesses to lead the way on this.”


The ACT’s Naresh Aggarwal, however, thinks that in many larger organisations, late payment can be due to poor operating processes, when “somebody somewhere in the process sits on an invoice for 30 days, 40 days before they actually realise it needs paying.


“A lot of it, I think, comes down to transparency – and I think there is a lot more we can do. We need to shine a light around processes internally, and also to create more transparent relationships with the supply chain. Hopefully COVID-19 can be an accelerator for this.”


Aggarwal also believes we are on the verge of a new era, where people can start to make the shift towards faster payments: “I think there are some really exciting areas where payments are delivering an opportunity for change. It allows things like the gig economy to be supported more effectively, getting cash moving into smaller businesses much more quickly. I think businesses need to understand a lot more about what works for them.”


The final word belongs to Lloyds’ Maclean, who believes no one should lose sight of the positive role regulation can play in driving innovation. “Regulatory-driven collaboration has given us some frankly brilliant systems. Faster payments is great for us as consumers and businesses. Open banking, confirmation of payee – these are real innovations from the UK payments market.


“I think we have got to look at regulations as an opportunity to innovate and improve what we have. We have got to help businesses pick out the advantageous parts and the commercial edge they can obtain by adopting these new services.”

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