Is B2B Payments Up for Disruption?

Traditional B2B payments processing takes a lot of time, but modern payment platforms automate work and reduce the time that it takes to manage money. Now that the introduction of a B2C payment solution saves resources, time, and costs for companies, employees, and customers. That’s going to be a quick fix and an ideal recipe for status quo disruption!

For instance, PayCircle can save you money and grow your business by investing in payment processing solutions. Today’s digital B2B payment methods and solutions can speed up payment reception and processing problems and help companies to improve positive cash flow. B2C payment solutions can help companies increase productivity and profitability by reducing costs, increasing efficiency, speeding up payments, and making them more convenient. 

The widespread adoption and extensive use of modern payment technologies for consumer transactions have greatly facilitated the adoption of the same technology in the B2B sector. Given the size of the market, the introduction of mobile payments for businesses is already a major trend in itself. What we need now is more innovation and upheaval in the payments industry.

Spilling the Beans…

B2B payments are no more a secret. The number of mobile payment users is expected to exceed one billion this year, reaching more than 1.3 billion by 2023. This will show that customers will expect more digital payment options. More than 90 percent of retailers will also support online payments as online shopping becomes more popular.

B2B is a great opportunity for the payment industry to lag behind. According to the latest B2B payment report by Mastercard, cheques are the most common way for businesses to make and receive payments, with a credit card, cryptocurrency, and same-day payment (ACH) contracts increasing. The risk is that digital B2B payments, which offer a higher level of security than cash and cheques, will remain and help businesses become more agile. 

More and more international companies are looking for new B2B payment solutions that are faster, less opaque, and cheaper. Businesses demand speed, simplicity, convenience, security, and processing of their payments. Companies’ demand for greater transparency, immediate payments, lower fees, and greater security in B2C payments means that traditional banks and financial service providers are frantically trying to break free and become FinTech. 

As consumers switch to online banking solutions, mobile payment apps such as Venmo, Zelle, and Square Cash, PayCircle and apps that pay directly to them and digital tools that replicate the experience for business owners, Deloitte expects the US B2B payments market to continue to grow in the foreseeable future. With digital penetration lagging behind, the market is ripe for upheaval, increasing investment in b2b. As innovation in B2b payments gains momentum, companies must keep an eye on the ball and look ahead as they develop and innovate for their customers. 

Read More: TOP 5 B2B Payments Applications

B2B (business to business) payments are transactions or payments between two merchants for goods or services. B2B payments differ from other payments methods, including P2P (person-to-person) and B2C (business-to-customer). As an entrepreneur, if you have an application or tool to increase productivity, such as a communication platform like Slack, you can pay monthly bills as B2P payments.

Compared to business-to-consumer (B2C), electronic B2B payments lag behind adoption in an industry where one-third of global B2C spending is electronic and two-thirds of global business-to-consumer spending (B2C). 

That may sound obvious, but a recent AP study found that three-quarters of all corporate payments are still made by cheque. According to the 2019 report of the AFP Electronic Payments Survey, organizations pay suppliers 42% of their payments by cheque, up from 81% in 2004. Despite the growing importance of digital payments, the majority of companies have not taken steps to reduce their paper cheque volumes.

The Real Innovation in the B2B World

In the B2B world, 64% of companies still pay by cheque. To corona, free payment, mobile apps, and electronic invoices (ACH) have passed paper invoices, checks, and POS payments. Most businesses are still writing checks, sending payments over the phone, and waiting for days. Corona Free Payments, mobile apps, e-invoicing, and ACH are significant side effects of a major restructuring of the payment industry. For example, the share of B2B companies making 90% of their payments has increased by 12 percentage points in just one year and is projected to reach a quarter of total B2B payments by 2020. 

Deloitte says that 61 percent of the B2B payments by 2020 will be made by large companies with more than $1 billion in revenue, with the rest of the payments coming from small and medium companies. Business-to-Business (B2B) payments are an attractive fintech sector with great market opportunities. The limited adoption of digital payments in B2C environments creates significant growth opportunities for digital disruptors. 

Read More: Introduction to Global Digital Payments: A Digital Revolution

According to a new study by Juniper Research, the impact of COVID-19 will accelerate the disruption of the B2B payments market, and it will take at least two years for companies to recover from their losses fully. The study shows the depth of disruption to businesses around the world during the coronavirus pandemic. It is estimated that cross-border B2C payments will reach $3.5 trillion in 2022, compared to a Covid-induced low of $2.7 trillion in 2020, with a growth of 30%. The pandemic has temporarily affected the current growth of the B2V payments market, but long-term forecasts show no signs of slowing down; indeed, additional growth could occur during the pandemic. 

Thanks to digital and mobile presence, business owners now have more visibility into their payments and cash flows and the ability to approve payments. Due to the widespread acceptance of virtual cards for B2B payments, many systems are able to automate all sorts of payment methods, whether virtual cards, ghost cards, or paper checks.

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