Kiwibank's James Woodward explains how businesses are increasingly going online to make and receive payments, as are their customers

By Bernard Hickey

I recently spoke to James Woodward, the head of transactional banking at Kiwibank about how small to medium businesses are moving their payments online to speed them up, make them easier for customers and to improve their cashflows. 

"We've recognised that the way people pay their bills is changing and the way businesses want to receive their payments is changing," he said.

"Payments are the lifeblood of the business and a really strong cashflow opens up doors and strengthens supplier relationships, and it means you can invest in your business going forward," he said.

Woodward said Kiwibank has recently launched its range of Fetch payment services designed to help Kiwi businesses get paid faster and easier.

Businesses of all shapes and sizes can now take payments on the go via a secure mobile app, via online, and use email to send invoices, as well as make it easier to be paid with credit and debit cards, and with batches of payments.

Where once businesses and customers sat down at their desks every fortnight or month to sort through their 'snail' mail and write out a bunch of cheques, now many were paying their bills via emailed invoices and online in an immediate way.

Often this was being done in the home, after hours and with an immediacy that could only have been dreamed of a few years ago.

Some are simply printing off those email and then repeating the old paper-based process, but the advent of more people using mobile devices and tablets at home was changing behaviours and expectations of both business owners and their customers, Woodward said.

These new technologies are changing how bills are paid and how often they're paid. They're also changing the time of the day they are being paid, often stretching out the business day into the early and late hours, and into the home.

"People are logging on and doing their banking more regularly, and they're concentrating at the start of the day, around 8-9 am, jumping on before the start of work. We're also seeing people sitting down from 7-9pm in front of the television, doing their online shopping and banking."

This meant regular invoicing was increasingly important. "If you can get in first then there's the perception that that's the invoice that needs to be paid first," he said.

Woodward gave the example of how a cafe owner taking a catering order over the phone could use a payments system set up by Kiwibank to improve cashflow and reduce credit risk by taking the payment over the phone before the order was delivered.

"Taking payment upfront has real benefits because there's no credit risk and from a cashflow point of view you've suddenly got the funds to go out and source that order," he said.

Kiwibank was seeing improvements in cashflow by customers using the newer systems. "We're seeing the need for bank overdrafts reducing and the payment administration time reducing," he said.

Woodward cited research from Britain showing businesses there spent an average 130 hours a year administering inwards payments.

"It's no fun and it's not allowing you to focus on growing your business," he said.

Using the new online tools also allowed businesses to get closer to their customers, effectively getting into their homes and workplaces at times when they wanted. Customers often wanted to pay immediately and not have to wait around for confirmation or payments to clear.

"It's that immediacy that their customers seem to like," he said.

Find out more about Kiwibank's Fetch recurring payments service in my interview with James Woodward last year.