Page 305 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

Employees:

Many entrepreneurs have problems delegating tasks to employees, especially tasks related to making payments
and getting paid. As businesses grow, however, entrepreneurs need to hire on more employees. They may
open multiple locations, and are unable to be in two places at once. Digital B2B payment services can give
entrepreneurs the tools they need to delegate more tasks to employees, while maintaining transparency and
security.

In this way, digital B2B payments could allow small buyers to hire and trust employees. Internal control features
offered by business payment providers, including PINs and passwords, would make it easier for business owners
to maintain security over payments. And, according to Rajpal Duggal of Oxigen, digital payments allow business
owners to discover problems associated with payments in days instead of weeks. This would give business
owners the opportunity to leave their stores and use their time more productively.

Relationship management:

Buyers often source their goods from many different vendors. Digital tools would allow buyers to manage
their relationships with each of their suppliers better, rather than rely on the sometimes-faulty recollection of
business owners and employees. In the developed world there has been an explosion of small business-focused
B2B purchasing tools that use eMoney for payment could bring that type of innovation to poor countries.

For example, the mobile payments platform Beyonic allows payers to store names, phone numbers, and
payment histories inside of the platform. This makes it easier for small buyers to track payments to suppliers
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and manage the overall relationships better by understanding fluctuations in purchasing over time. It also
makes repeated payments easier by not forcing small buyers to re-enter information every time they want to
make payment.

Over time, small businesses could use this information to make better business decisions. Data on the most
frequent suppliers, cost comparisons between suppliers, evolving expenditure patterns, or other data stored
in the system could enable enhanced analytics for small businesses. Strategic supplier and procurement
management is a key element of business continuity and scalability.

Regulatory compliance:

Digital payment tools could also make it easier for small buyers to keep track of digital payments and create
accurate accounting. This ability could enable easier regulatory compliance, including timely and accurate tax
payments for small businesses.

Of course, this improved regulatory compliance is a benefit only for those companies that hope to remain
compliant. Companies that want to evade taxes or other regulatory obligations would not see this as a benefit.

Example #1, Farmaenlace:

Rural Ecuadorians often have trouble accessing medical equipment and drugs. Many have to spend precious
resources travelling to larger cities to visit hospitals. Recognizing this challenge, the drug distribution company
Farmaenlace decided to expand into rural markets.

With help from the Inter-American Development Bank (IDB), Farmaenlace set up drug store franchises in rural
areas of Ecuador. The franchise operators received training, advertising, and bonuses for sales. All constituents
benefitted from the program: For the IDB, the project was part of an inclusive business initiative designed to
help poor people; for Farmaenlace, the franchises sold up to 50 per cent more than the company’s own drug
stores; for the franchise owners, monthly income went up by $2,400 after expenses. 13

Digital B2B payment tools could help programs like this in a number of ways. The most basic is that B2B
payments services could make payments between Farmaenlace and its franchises more transparent and

12 Based on an interview with with Dan Kleinbaum, COO of Beyonic: http:// beyonic. com/
13 Transforming Business Relationships: Inclusive Business in Latin America. Inter-American Development Bank 2015.

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