PayPal does not intend to be conditioned by president David Marcus’s recent departure to work for Facebook, neither does it plan to rest on its laurels as current leader in digital payments. And this must be taken into consideration when reading the latest announcement of the Next Day Settlement (NDS) pilot program that will allow (in the U.S. only) for the transfer of money B2B within 24 hours through the PayPal account.
This reduces the waiting time by 75% from the 3-4 days necessary for processing by banks. The PayPal transfer is also free of charge. Steven Chien, the product manager of the Money Management area, wrote on his blog that this service was created in response to the needs of business clients whose increasing dissatisfaction has been ignored by banks.
Recently, the attention seems to have moved clearly towards services that favor the final consumer. The argument that has been made many times now is that B2B commerce is geared towards clients who already know what they want, they don’t need particular experience in acquiring or transferring money. This has caused B2B online to be just an extension of the offline reality. And, in the face of this scarcity of offers, business clients have become increasingly less loyal. In order to avoid losing market shares, payment industry operators should realize that a well-planned and better-managed B2B is an indispensable tool. Observed from this angle, B2B projects are equally complex and need adequate tools, they cannot be improvised and must have the goal of reaching and measuring. A challenge that PayPal has demonstrated it is willing to confront as a protagonist.
The next step (which is not far off) will be a service that permits real-time receiving of money, or at least same day. The limit, at this moment, is the fact that PayPal still makes transfers through the current banking system that does not permit these time frames. “There are still banking partner and internal policies that have to be met, so in order to meet these criteria, we are offering Next-Day Settlement.” This was the comment made by Steven Chien when interviewed at the time of the launch of NDS, soon to be available on 200 markets where PayPal is present. He also promised that there will soon be other innovative novelties in the B2B sector that the PayPal team is currently working on. It will be a wait of curious anticipation.
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