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  • Published In : Apr 2024
  • Code : CMI6917
  • Pages :165
  • Formats :
      Excel and PDF
  • Industry : Smart Technologies

Market Size and Trends

The B2B payments transaction market is estimated to be valued at US$ 1,576.61 Bn in 2024 and is expected to reach US$ 3,021.25 Bn by 2031, growing at a compound annual growth rate (CAGR) of 9.7% from 2024 to 2031.

B2B Payments Transaction Market Key Factors

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This sector encompasses payments made between businesses, as well as between businesses and suppliers. The growing digitization of B2B commerce and increasing adoption of digital payment methods are driving the transaction value in this marketplace.

The B2B payments transaction market is trending towards the greater digitalization and automation of business spending. Corporations are embracing tech-enabled B2B payment solutions that integrate with their Enterprise resource planning (ERP)/accounting systems for enhanced reporting and reconciliation capabilities. Digital payment rails are also growing in popularity over paper-based methods like checks, as they offer improved security, speed, and insight into organizational spending habits. This digital shift will continue propelling transaction volumes higher over the forecast period.

Market Concentration and Competitive Landscape

B2B Payments Transaction Market Concentration By Players

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Market Drivers: Rise of Real-Time Payments

With the growth and widespread adoption of real-time payment systems, organizations across multiple industries are able to initiate and receive near-instant payments from both consumers as well as other businesses. This has helped drive efficiency improvements in reconciling accounts as well as enabled new use-cases across procurement, supply chain management and inter-company settlements.

Real-time payments allow an enterprise to track payments in real-time and identify delays or errors instantly. Settlements between businesses can be completed same-day, reducing the risks involved with pending payments. This has made B2B transactions more seamless and secure. Industries which require assurance of upfront payment are embracing this change. For example, utility companies can now enable their business customers to pay invoices instantly online rather than wait for checks to clear. Freight carriers can receive instant payments against proof of delivery.

The ability to add remittance information along with payments opens up opportunities for automated reconciliations. With rich data accompanying each transaction, the receiving organization's accounting system can map payments to the corresponding invoices automatically. This streamlines the approval process and cuts down manual efforts spent on bookkeeping. Concerns around timing differences between payment confirmation and receipt are also addressed.

Adoption of real-time rails has spurred payment providers to offer value-added services integrated with ERP, accounting and billing systems. Buyers and suppliers can now view payment status and analytics in their usual workflow without logging into separate bank portals. Additionally, platform players have launched approval and foreign exchange services to increase control and visibility over organizational cashflows.

This shift towards hyper-speed, data-rich transactions has modernized outdated B2B payment cycles. It will continue to drive acceptance of virtual payment methods and promote anytime, anywhere commerce between businesses.

Market Driver: Growing Adoption of Virtual Payment Methods

With cross-border commerce burgeoning, businesses increasingly rely on digital modes of payment to simplify managing global transactions. Traditional methods involving checks, cash or wire transfers are cumbersome for frequent, low-value B2B payments. They also expose companies to foreign exchange volatility and delays during settlement.

This has propelled adoption of virtual payment types like credit transfers, real-time payments and commercial card payments. These provide attributes like instant settlement, payment tracking, and ability to pool expenses and optimize cash. They are also applicable for both domestic and international suppliers without complexities

B2B Payments Transaction Market Key Takeaways From Lead Analyst

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Market Challenges: Enhancing B2B Payments Transaction Infrastructure

The B2B payments transaction market faces challenges around legacy systems and processes. Many businesses still rely on paper-based or outdated electronic systems for exchanging remittance data and payment files with suppliers and customers. This leads to manual processes and errors that increase costs and reduce efficiency across the supply chain. Standardization of data formats and connectivity between disparate systems is still a work in progress.

Market Opportunities: Unlocking Potential for Modernizing B2B Payments

However, the market also presents opportunities to help businesses modernize and streamline their B2B payments. As companies face pressure to cut costs and gain more visibility into cash flows, they are increasingly looking to adopt digital payment platforms and technologies like AI, APIs and blockchain. This allows for automated reconciliation, faster payment cycles and richer datasets that improve decision making. New entrants are bringing innovative solutions to address interoperability challenges as well.

B2B Payments Transaction Market By Payment Type

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Insights By, Payment Type- Domestic familiarity drives Preference for Domestic Payments

In terms of payment type, domestic payments contributes the highest share of 61.5% in 2024 of the market owing to the familiar business environment and relationships that companies have within their home country. Transacting domestically allows businesses to leverage existing banking partnerships and payment rails that require minimal setup costs and streamline approval processes. This preexisting infrastructure established through years of operation makes domestic transactions frictionless compared to setting up arrangements in new foreign markets.

Moreover, domestic political and regulatory stability provides predictability that is valuable for budgeting and cash flow management. Complexities from currency exchange rates, differing public holidays, and distance are non-factors versus international payments. The shared language, culture, and time zones between domestic trading partners also enables faster resolution of any issues that arise. Overall domestic operations feel lower risk which is important for Just-In-Time inventory management between suppliers and manufacturers.

From a relationship perspective, locally based companies have formed partnerships over extended periods within their home market and developed personal connections with other businesses. This fosters high levels of trust compared to unproven foreign counterparts. Existing customers are hesitant to trial untested partners in new countries when adequate options are available domestically. Localized industry knowledge further supports addressing customer needs promptly without experiencing delays from communicating across borders.

Insights By, Payment Method - Online enablement boosts bank transfer usage

In terms of payment method, bank transfer contributes the highest share of 47.9% in 2024 of the market owing to advancements in online banking platforms that have streamlined the process. Where bank wires once required significant manual effort, payment initiation can now be accomplished from any internet-connected device with only a few clicks. Automated clearing house (ACH) networks in many regions have similarly eliminated the paperwork formerly associated with electronic funds transfer (EFT).

Integrating bank accounts into accounting software solutions via application programming interfaces (APIs) lets accounting departments easily schedule and track inbound/outbound transfers. This displaces older methods dependent on mailing checks or manually processing remittance advices. Time savings from the self-serve experience has increased usage even for micropayments that were not previously worth the bank's fixed transaction costs. Additional functionality like recurring and template-based payments has further boosted efficiency.

Younger, technology-oriented businesses also prefer the audit trail and security of bank-based rails over alternatives like mailing cash. Centralized dashboards provide full payment history and balances at any moment versus manual record keeping. Multi-factor authentication and encryption further assures funds are only released to validated recipients. Overall enhanced traceability builds confidence that obligations will clear as contracted.

Insights By, Enterprise Type- Operational scale drives priority for large enterprises

In terms of enterprise type, large enterprises contribute the highest share of 65.3% in 2024 of the market owing to economies of scale that make optimized payment platforms a high priority. Complex supply chains and thousands of vendor relationships require coordination impossible with outdated manual methods. Large fixed costs are justifiable to consolidate partnerships onto platforms streamlining approval workflows, payments, and remittance between divisions and suppliers.

High transaction volumes also attract preferential rates from financial institutions operating payment gateways. Large clients receive dedicated support and flexibility configuring the platform to their needs. Most can negotiate fee discounts reducing processing costs to a tiny percentage of payment value. The savings recouped far outweigh development and licensing investments.

Compliance and risk management further scale with company size. Large legal/finance teams ensure internal payment controls and vendor on boarding meet stringent corporate policies. This protects brand reputation from any appearance of impropriety. Separation of duties within approval workflows prevents fraud whereas small businesses often centralize responsibilities. Advanced reporting also supports audits at a level not feasible with basic options.

In summary, the scale of resources exchanged through huge enterprise payment networks demands optimization only attainable by specialized B2B platforms. Their complexity creates a self-reinforcing ecosystem most appealing to the largest organizations. Streamlined liquidity management then cascades benefits across entire supply chains.

Regional Insights

B2B Payments Transaction Market Regional Insights

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North America has remained the dominant region with 41.2% in2024 of the global B2B payments transaction market over the past decade. The region boasts a strong presence of payment processors and financial technology companies that offer various payment solutions catered towards businesses. The digital payment infrastructure and acceptance rates are highly developed here, allowing for seamless B2B transactions both domestically and cross-border. In addition, supportive regulations by governing bodies have helped create a conducive environment for electronic B2B payments to thrive. Industrial sectors like manufacturing, retail, healthcare that involve significant B2B activity are well established in the region. This has sustainably driven the utility of digital B2B payments for procurement, payables, receivables and others on a large scale.

The Asia Pacific region has emerged as the fastest growing market for B2B payments globally in recent years. Rapid digitalization of businesses combined with rising internet and smartphone penetration have accelerated the shift from traditional to electronic B2B payment methods. Cross-border B2B transactions between Asia Pacific countries as well as with North America and Europe are increasing at a breakneck pace. This is strengthening the business case for payment solutions tailored to B2B commerce. Several global payment providers have augmented their presence in developing markets within Asia Pacific to tap rising demand from SME and large enterprise segments. Regional players are also introducing new age payment products to gain ground in the energetic commercial landscape of Asia Pacific. The confluence of economic growth, regional trading and digital transformation continue to propel the B2B payments transaction market in Asia Pacific ahead of other regions.

Market Report Scope

B2B Payments Transaction Market Report Coverage

Report Coverage Details
Base Year: 2023 Market Size in 2024: US$ 1,576.61 Bn
Historical Data for: 2019 To 2023 Forecast Period: 2024 To 2031
Forecast Period 2024 to 2031 CAGR: 9.7% 2031 Value Projection: US$ 3,021.25 Bn
Geographies covered:
  • North America: U.S. and Canada
  • Latin America: Brazil, Argentina, Mexico, and Rest of Latin America
  • Europe: Germany, U.K., France, Italy, Russia, and Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, and Rest of Asia Pacific
  • Middle East & Africa: GCC Countries, South Africa, and Rest of Middle East & Africa
Segments covered:
  • By Payment Type: Domestic Payments and Cross Border Payments
  • By Payment Method: Bank Transfer , Cards , and Online Payments
  • By Enterprise Type: Small & Medium Enterprises and Large Enterprises
  • By Industry: Government , Manufacturing , BFSI , Metal & Mining , IT & Telecom , Retail & E-commerce , and Others (Healthcare, Energy & Utilities) 
Companies covered:

Mastercard Inc., FIS , Stripe, Inc. , Paystand, Inc., Flywire , Squareup Pte. Ltd, Edenred Payment Solutions , Payoneer Inc. , American Express , Visa Inc. , JPMorgan & Chase, Adyen N.V., Billtrust, Coupa Software Inc., Dwolla, Inc., Earthport PLC, FLEETCOR Technologies, Inc., Intuit Inc., Nvoicepay, Inc., Optal Limited, Paytm Mobile Solutions Private Limited, PayPal Holdings, Inc., TransferWise Ltd. (Now known as Wise), and Scoot and Ride

Growth Drivers:
  • Rise of Real-Time Payments
  • Growing Adoption of Virtual Payment Methods
Restraints & Challenges:
  • Enhancing B2B Payments Transaction Infrastructure
  • Legacy systems integration challenges

Key Developments

  • In October 2023, Visa Inc. partnered with Swift to simplify international business-to-business (B2B) payments and enhance communication among global businesses
  • In September 2023, Sprinque, a payment service provider from the Netherlands, expanded into Germany and Spain to capture the European market by broadening its portfolio of cross-border B2B payment platforms
  • In July 2023, ConnexPay, a payment technology firm facilitating payments, introduced innovative real-time B2B payment solutions in Europe, supporting transactions in British Pounds (GBP) and Euros (EUR)
  • In June 2023, Aria, a France-based FinTech company, inaugurated a new office in the U.K. to expand its B2B Deferred Payment Infrastructure. This move aims to boost online B2B commerce, enhances connectivity for marketplaces, and improves trading SaaS platforms and ERP systems.
  • In October 2021, Kyodai Remittance, a Japan-based fund transfer business, collaborated with Western Union to launch cross-border B2B payment transfer solutions for corporate clients in Japan
  • In July 2023, Grovara, an exports and imports wholesale marketplace, entered into a partnership with TransferMate to increase the speed of cross-border payments on the first B2B online marketplace to receive frictionless payments from customers.
  • *Definition: The B2B payments transaction market facilitates payment transactions between businesses. It provides payment processing solutions that allow businesses to pay other businesses and suppliers in a fast, secure and convenient way. Businesses can use this market to pay invoices, reimburse expenses, pay international suppliers and partners, and transfer funds between commercial bank accounts. Payment methods include cards, bank transfers, digital wallets, and emerging technologies..

Market Segmentation

  •  Payment Type Insights (Revenue, US$ BN, 2019 - 2031)
    • Domestic Payments
    • Cross Border Payments
  •  Payment Method Insights (Revenue, US$ BN, 2019 - 2031)
    • Bank Transfer
    • Cards
    • Online Payments
  •  Enterprise Type Insights (Revenue, US$ BN, 2019 - 2031)
    • Small & Medium Enterprises
    • Large Enterprises
  •  Industry Insights (Revenue, US$ BN, 2019 - 2031)
    • Government
    • Manufacturing
    • BFSI
    • Metal & Mining
    • IT & Telecom
    • Retail & E-commerce
    • Others (Healthcare, Energy & Utilities)
  • Regional Insights (Revenue, US$ BN, 2019 - 2031)
    • North America
      • U.S.
      • Canada
    • Latin America
      • Brazil
      • Argentina
      • Mexico
      • Rest of Latin America
    • Europe
      • Germany
      • U.K.
      • France
      • Italy
      • Russia
      • Rest of Europe
    • Asia Pacific
      • China
      • India
      • Japan
      • Australia
      • South Korea
      • ASEAN
      • Rest of Asia Pacific
    • Middle East & Africa
      • GCC Countries
      • South Africa
      • Rest of Middle East & Africa
  • Key Players Insights
    • Mastercard Inc.
    • FIS
    • Stripe, Inc.
    • Paystand, Inc.
    • Flywire
    • Squareup Pte. Ltd
    • Edenred Payment Solutions
    • Payoneer Inc.
    • American Express
    • Visa Inc.
    • JPMorgan & Chase
    • Adyen N.V.
    • Billtrust
    • Coupa Software Inc.
    • Dwolla, Inc.
    • Earthport PLC
    • FLEETCOR Technologies, Inc.
    • Intuit Inc.
    • Nvoicepay, Inc.
    • Optal Limited
    • Paytm Mobile Solutions Private Limited
    • PayPal Holdings, Inc.
    • TransferWise Ltd. (Now known as Wise)
    • Scoot and Ride

Frequently Asked Questions

The CAGR of the B2B payments transaction market is projected to be 9.7% from 2024 to 2031.

Rise of real-time payments and growing adoption of virtual payment methods are the major factors driving the growth of the B2B payments transaction market.

Enhancing B2B payments transaction infrastructure and limited appeal among older kids who want pedal bikes are the major factors hampering the growth of the B2B payments transaction market.

In terms of payment type, domestic payments is estimated to dominate the market revenue share in 2024.

Mastercard Inc., FIS , Stripe, Inc. , Paystand, Inc., Flywire , Squareup Pte. Ltd, Edenred Payment Solutions , Payoneer Inc. , American Express , Visa Inc. , JPMorgan & Chase, Adyen N.V., Billtrust, Coupa Software Inc., Dwolla, Inc., Earthport PLC, FLEETCOR Technologies, Inc., Intuit Inc., Nvoicepay, Inc., Optal Limited, Paytm Mobile Solutions Private Limited, PayPal Holdings, Inc., TransferWise Ltd. (Now known as Wise), and Scoot and Ride are the major players.

North America is expected to lead the B2B payments transaction market in 2024.

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