The global volume of cross-border B2B payments will exceed 40 trillion dollars by the end of 2024. This growth of 3 trillion dollars (9%) compared to the year 2022, which reached 37 trillion dollars, will be driven by the growing popularity of marketplacesaccording to the study ‘B2B Payments: Key Opportunities, Segment Analysis and Market Forecasts 2022-2027’ made by Juniper Research.
Specifically, this research provides an in-depth analysis and evaluation of how the B2B payment environment is changing rapidlyas well as an assessment of the market progress of various B2B payment methods and what their growth means in terms of future opportunities for stakeholders in the B2B payment ecosystem.
The report underlines that “the cross-border transactions have generally been slow, expensive and difficult to tracea problem that has been exacerbated by the complex accounts payable processes common with larger companies.. However, it stands out “the rise of cross-border instant payments, where payments are made in 10 seconds or less, is significantly improving this difficult situation”. Currently, the instant payments are restricted to certain cross-border destinations.
Also, the research co-author, Nick Maynardexplain what “While instant cross-border payments are not yet widespread, only accounting for 8% of cross-border transactions by value globally in 2024, significant progress is being made in linking national instant payment schemes”. “This can unlock substantial improvements for B2B transactions. The B2B payment providers should drive further integration of payment rails Instant Support Nationwide to Solve Tough Challenges with Legacy Pay Channels”indicates Maynard.
The marketplace model: “promising but creates challenges”
The study also reveals that the marketplaces are driving growth within both cross-border B2B payments as in the e-commerce payment market. However, since marketplaces involve multiple different vendors, “all paying each other at different times in different ways, this creates considerable complexity and difficulties in reconciliation, FX (Foreign Exchange) and fraud prevention”.
As such, the report recommends that B2B payment providers offer features such as integrated virtual cards and virtual IBANs (international bank account numbers) for local payments, to properly address these challenges.
Forecast for 2027
To 2027the global volume of cross-border B2B payments will exceed 111 trillion dollars. This 26% growth Compared to last year, 2022 will be driven by rising prices caused by inflation, as well as strong economic growth in developing markets.
In this sense, the study points out that “a increased automation of accounts payable and receivable is essential for the increasing efficiency of payment processing; creating a significant opportunity for B2B payment providers”.
In conclusion, the report indicates that with the average business making more than 1,400 domestic payments per year worldwide by 2027, improve efficiency in payment processes will be essential. The instant payments and additional remittance data provided by ISO 20022 will unlock greater opportunities to seamlessly arrange and reconcile payments by enabling automated reconciliation. Furthermore, by taking advantage of new technologies within the processes of accounts payable and receivablecompanies can unlock significant cost savings, “which is critical in a time of economic uncertainty.”
Lastly, regarding the new payment methods such as CBDCs, “they hold great promise to solve the challenges within the B2B payments sector”. “Being purely digital, CBDC payments will be able to be fully automated, being easily tracked wherever the payment is,” the study notes. However, “CBDCs should be designed with B2B payment use cases in mind, as these are generally more complex than consumer payment processes”concludes the report.