EP1012: The current trends in B2B payments for 2026

Pat Bermingham, CEO, Adflex

We review the top trends that will transform how businesses make and take payments in the modern world. Robin Amlôt of IBS Intelligence speaks to Pat Bermingham, CEO of UK-based B2B digital payment processor Adflex. The company is Europe’s leading processor of commercial card payments, processing over 7 million transactions a year for more than 4,000 businesses. Among the topics discussed: the consumerisation of B2B payments, digital identity, ISO 20022, straight-through processing and the role of agentic AI.

Transcript

SPEAKER_01 0:00

I'm Robin Andler of IBS Intelligence. You're listening to the IBS IVs podcast. With me today is Pat Bermium, Chief Executive Officer of AdFlex. And a welcome return to the podcast for Pat. So hello again, Pat. Let's start with what we're talking about business payment trends. And the point I wish to start on is the consumerization of B2B payments. What do we mean by consumerization?

SPEAKER_00 0:34

Yes, consumerization. It doesn't mean it's it's making it simplistic, it's just making it work with real people who are used to working in the in with their personal kind of digital devices, all this kind of stuff. So we're kind of bringing the um the consumer world into the um business world. In other words, we'd take the best bits of it and hopefully make the experience better.

SPEAKER_01 1:00

It's not just the best bits, it's perhaps also the newest bits, because what we've seen happen in retail finance over the course of the last five to ten years was not necessarily always being mirrored by what was happening in B2B finance.

SPEAKER_00 1:20

That's correct. I mean the financial models are very different. I mean, a consumer sees something, wants it, pays for it, gets it. Whereas in the B2B world, it's somewhat different. Um there could be a whole kind of process behind the scenes to source the item, to raise a procurement process, uh purchase order, and so on and so forth. Uh so this is the difficult bit, is making the payment fit in there seamlessly and safely. Uh, but there are kind of steps that we can take uh to make that easy, easier. All right.

SPEAKER_01 1:58

Well, how is the technology changing the way B2B payments are made? I'm thinking in particular of the digital identity. How is digital identity changing the way payment approvals are being done?

SPEAKER_00 2:18

Yes, well, firstly I'll say that it's different that digital identity, you know, discussion is really gummy about people in the real world, not in a kind of consumer, sorry, in a consumer space and not in the business world, where the business is um more reliant on do I is this the real company, which brings in kind of identity for the company as well as the person that's making the the approval to make the payment. Onboarding is really down to KYC. KYC traditionally has taken a long time. For example, if somebody uh if a supplier wants to open up a merchant account, it can take weeks and weeks of um to in and throwing to get it.

SPEAKER_01 3:04

And that's that's compared to a personal account, which I could open in a couple of hours, a day?

SPEAKER_00 3:12

Even quicker, yes, because um in the consumer space, it's very, very quick because the risk profile is different, you know, because you're dealing with individual people who who pose a smaller risk to the whole organization. But if it's a business and it's large payments, that's a lot of difference. So therefore, there's a lot more KYC. And simply because you're not KYC in just the person, you're KYC in the organization they're within. Are they a beneficial owner? Are they on any sanctioned lists, etc.? So it's kind of a different process. And it is slowly being speeded up, but it it is very much a problem of today, where um somebody to be on boarded to get a merchant account can take weeks. And we're we are working with acquirers to try and make that quicker.

SPEAKER_01 4:07

You may be working with acquirers to try and make that quicker, but surely the ability to access digital information and rich data should of itself make that process faster.

SPEAKER_00 4:21

It should do, yes. Uh, but the key thing here is um authentication authorization. How do we know that data is correct? So do we have a source of truth? We don't quite have all that in place yet. I mean, the Digital ID Act that's coming in in the next couple of years from the government is gonna kind of overlap onto the business side as well, because there will be a structure in place that companies will be able to take advantage of. I mean, for example, legal identifiers, um, which that would be kind of proof that you are the company and as well as you are the authorised person within that company.

SPEAKER_01 5:03

So, what's happening right now in B2B payments?

SPEAKER_00 5:07

Um, there's quite a lot happening. The biggest um story really is straight-through processing. Straight through processing is um a game changer in the way it works. Instead of the card or the payment being transmitted to the buyer uh to the supplier, the it is actually made by the buyer on the supplier's behalf. So it doesn't matter if it's a card or if it's a bank transfer or whatever. The fact is the supplier has been relegated to delivering the service and receiving the payment. The buyer, on the other hand, can choose which payment method they want. And typically, if they're using a card, they will have something like a line of finance built into it. So that gives um a lot of advances with cards, and also the payment can be made quicker to the uh supplier. So it does automate, it does a really quick way of automating the payment process in and simplifying it.

SPEAKER_01 6:05

Moving on, I thought I'd put this issue to bed. Obviously, I haven't, because it still keeps cropping up in conversations. ISO 2022, which was implemented as of November last year. How is that transforming business cash flow?

SPEAKER_00 6:22

Indirectly, um, if if I could just deviate from the question, uh what it's done, it's created a standard. That's number one, that's the most important thing. Whereas where we are working with companies that want to make payments, there is a plethora of standards, different ways of getting us back that payment information. If they are able to send us a 20 oh 22 message, we're able to act upon it really quickly and convert that into a payment. So therefore, you know, onboarding is quicker, the kind of the data is more consistent. It's just a win all the way, all the way round. What's the role of AI? I have to ask that. Do we hate it or love it? Um that's not this this is not the forum for that. But um, yes, AI, probably the most overhyped thing this last 10 years, I guess. Um, there are some really good um things coming out of AI, but it and it's gonna completely transform the way payments are made. But that's without doubt. And I'm not just talking about agentisation where you know something is going to go off and automatically make payments for you on your behalf. It's how the whole process interacts. Currently, we're going from entering a card from a piece of plastic or a wallet, which is effectively just still a card, and we're still suffering from identity theft, you know, to use that card. Someone steals your card, you can't make the payment. They'll become more seamless where AI will be able to be a custodian of you and act on your behalf. Now that's the tricky bit, uh, which has not been kind of completely solved yet. Do you trust AI to make payments on your behalf? That's a big question. And the the other problem is that security companies, because of the threat of AI, is so high outside of payments to the very existence of the company from ransomware attacks and all this kind of stuff, that there are a lot of security tools now that are kind of building their own guardrails around any AI stuff that may be inserted into that process. So we don't know exactly how that's going to pan out. There's a trust relationship required with the company, the payer, the the the actual security company that is is protecting your your network, your business. It's it's a whole different problem that's been kind of created over the last couple of years that we're still coming to terms with, I think.

SPEAKER_01 9:01

On a cheerful note, there are benefits that we've seen already, though, in the uh data-rich transactions that are now possible, automation-ready infrastructure, and compliance and transparency benefits, provided people follow the right steps.

SPEAKER_00 9:19

Yes, you're right. I mean, one of the big things is sourcing uh for companies if they want to buy, you know, steel pipes, uh, you know, 30 mil diameter, somebody has to go off and source it and then compare and do all this sort of stuff. All that can be kind of agentised now, where you can tell AI to say, I am a sourcing agent for this company, I want to source the follow-in goods and give it a whole clear prompt of what to do. Then what the agent will do then will go and search, match, and recommend the best route forward. Where in the early stages there'll be, do you wish to buy these now? And then you have to give the authority to say yes, so I would like to purchase these now. Then it will be which which ERP system do you want it to go through? Like, you know, are you going to be raising a purchase order, a requisition, the invoice? Is it going to be paid on order or paid on delivery? So all these kind of decisions can be optimized by AI.

SPEAKER_01 10:25

All right, that's the decision-making process. And that's that's a a work in progress, I guess, is what we can say that uh at this point.

SPEAKER_00 10:34

Yes, it's evolving rapidly, you know, week to week. If you just sat down and listened to all the the news coming from the payment industry and other industries, it's just a lot of information out there, a lot of kind of ideas and stuff. So it's going to take some time to consolidate and be become part of the infrastructure.

SPEAKER_01 10:56

Well, you say it's going to take some time, Pat, but the one thing I have noticed in recent months, even, if not recent years, is that I used to ask people the question like, what does the business look like in five years' time? These days we're talking about what does it look like at the end of the year? Yeah. What do you see Which is crazy? What do you what do you see transforming B2B payments in the rest of 2026?

SPEAKER_00 11:24

Um, I would say that the the agency thing is becoming big. I mean, from the consumer side of it, then you know, somebody planning a wedding or a party, it's perfect for that, you know, where you know, go and source me the food, the flowers, the tables, chairs, etc., and even the transport. Um, so it's gonna put, you know, kind of wedding planners under a lot of pressure. From a business perspective, um, as the example I gave earlier, then I think it's gonna be more inbuilt into these sourcing and CRMs, which we're already seeing that. So therefore, when you're trying to do something, the inbuilt AI is then now offering to help you, where soon that'll become more to the forefront. And I'd say that's that's happening as we speak. Um, it's gonna be, you know, if if there's there are no systems that don't have that kind of integration built in if they're if if they're gonna survive. So by the end of this year, we're gonna see a lot more automation in the payment process.

SPEAKER_01 12:26

Pat Birmingham, Chief Executive Officer of Adflex, thank you very much. You're welcome.