The state of European payment operations: planning for the future

Around the globe, the payment experience has been changing rapidly. Everything from an online checkout to real-time payments is expected to be frictionless while still offering the payee a variety of payment options. Embedded finance is on the rise and expected to exceed 7 trillion dollars by 2026, according to Bain & Company, and the global volume of instant payments is growing at a staggering 30% per year.

While consumers have benefitted the most, many B2B companies are examining their own payment operations. Even though companies may have an established payments workflow — the cycle of moving money through the business — it’s rife with inefficiencies.

At Numeral, we wanted to better understand how finance leaders think about their payment operations. To do so, we ran a survey in partnership with OpinionWay and CFO Connect with 905 decision-makers, including titles such as CFOs, SVPs, VPs of accounting, controllers, and payment managers, from companies with 250 to 5,000 employees in either Germany, France and the UK.

Along with many findings, one thing was clear: payment operations have emerged as a business necessity. Without the right systems in place, companies face higher costs and a competitive disadvantage.

This article summarises the key takeaways from the results of the full report, The state of European payment operations.

Companies face payment operations challenges

Across the board from the companies surveyed, most operational challenges were tied to fragmented systems and manual processes.

Surveyed companies used between 3-4 different payment methods, both to execute pay-outs and receive pay-ins. Companies had more than three different banks, with some also juggling third-party payment processors, payment service providers, and neobanks.

Even with several payment solutions in place, 68% of respondents say that more than 25% of tasks were handled manually. Payments are still received via cheques or cash, and the lack of integration between tools is one of the underlying issues. Another 29% are still using spreadsheets in their payment operations. All of this results in time lost per week, with internal resources spending time on manual work that could otherwise be spent on higher-value work.

Decision-makers understand the benefits of payment system upgrades

According to the people surveyed, 88% expect to benefit from improving their payment operations. While some are attempting to handle this internally, it puts pressure on IT, engineering, and product teams to solve the challenges themselves. This also takes away from the core focus of the business.

Decision-makers are well aware of the benefits of better payment operations, citing automation, faster bookkeeping, a better customer experience, and reduced errors at the top of the anticipated improvements. They can also increase visibility when moving away from disparate systems. Each of these would improve the bottom line, whether it’s faster payment collection from customers to internal costs saved by eliminating manual work.

Even while decision-makers know that implementing new systems can have its own challenges, they’re willing to make the investment. 89% plan to invest more than €50,000€ in upgrading payment operations, and 5% plan to invest more than €1,000,000. Most plan to make improvements within the next 18 months.

Investment in payment systems brings opportunities

The process to modernise payment operations and payment systems, while deemed urgent, is also viewed as complex. Even as payment executives understand the benefits, they know they need to integrate new systems with their existing payment infrastructure, often built on legacy systems with legacy interfaces. In the long run, such limitations can hinder growth, especially for companies that want to expand into a global market.

And while the people surveyed understand the urgency, other executives in the company may not. The investment may be deprioritised in the company’s budget or delayed due to the resources required to plan and transition to a new system.

Yet based on the results, we know that payment leaders plan to keep pushing for changes. They know that the company will significantly benefit in both the short and long term. They are exploring solutions that combine security, reliability, automation, and ease of use.

Numeral helps companies modernise their payment systems by bringing together product, IT and finance teams. Thanks to its pre-built bank integrations, made available via a flexible API or file connectivity, Numeral makes it easy to add new banks, payment methods and workflows to existing payment systems.

And via automated reconciliations, advanced user controls and approvals and a modern dashboard, Numeral gives finance teams total control and visibility over their payment operations and all their bank accounts.