August 31, 2020
Business to Business (B2B) Payment Trends to Watch in 2020
B2B –Business to Business payments are gaining impetus in the modern era –both in the number of transactions as well as the total value of transactions. The global market of B2B payments is estimated at a total value of around $38 trillion by the time of 2020. The market for B2B payments in the United States market individually is valued at around $25 trillion while growing at a rapid rate of CAGR at 5.8 percent. Business to Business (B2B) Payment Trends to Watch in 2020
Payment Trends to Watch in 2020
B2B payments are driven by the innovative cloud technology. This helps in accelerating the process of digital transformation of the entire payment industry while providing the customers with a series of seamless payment methods. The given shift is happening because the consumers are constantly looking forward to leveraging on-demand & instant access to all the features.
As leading banks have been inconsistent in delivering in the first instance with respect to B2B payments, reputed fintech firms from all around the world have entered the given market with the intent of disrupting. To understand more about this lucrative industry, let us take a dive into the latest B2B payment trends you should know about. Here are some for you to look into:
- Digital Payments: With a major number of B2B payments being still processed with the help of checks, digital payments aim at conveniently closing the gap as more businesses are considering going digital. In a report, it was reported that around 81 percent of businesses made use of checks for payments in the year 2004. However, by the time of 2016, the given value went down to reach as much as 51 percent. Across the globe, digital forms of payments are estimated to reach around $23.7 trillion by the end of 2020.
With the commencement of the leading ecommerce marketplaces, digital B2B payments have gained huge momentum. As per the reports of the Credit Report Association and NACHA, 32 percent of B2B payments have now become ACH (Automated Clearing House) form of payments. At the same time, the industry is expected to increase to as much as 45 percent by the end of 2020. While wire and digital payments have witnessed an overall increase in utilization, the instances of check payments have been going down steadily.
From mobile wallets to online forms of card payments, both merchants and consumers have been selecting digital alternatives for paying for the respective goods & services. Digital payments are known to offer the overall benefits of being quick and delivering ease of integration into the existing setups. This helps in lowering the overall processing costs while streamlining workflows. This is the reason why digital payments have helped in seamlessly revolutionizing the global B2B payment market.
- Automated Payments: As per the leading credit card service providers, businesses that go forward with automating the payments related to AR (Accounts Receivable) can look forward to managing incoming cash flows effectively. This leads to reduced liquid cash