June 16, 2024
B2B Payments Transaction Market

B2B Payments Transaction Market Primed for Growth Due to Digitalization

The B2B payments transaction market refers to payment exchanges that take place between businesses, covering activities such as billing, invoicing, and expense reimbursements. Businesses use payment methods like bank transfers, cards, Direct Debits, and Real-Time Payment systems to facilitate faster and more convenient business-to-business transactions. With digitalization reducing reliance on paper checks, more businesses are embracing electronic payment mechanisms for faster payment settlement and ease of reconciliation.

The global B2B payments transaction market is estimated to be valued at US$ 1,576.61 billion in 2024 and is expected to exhibit a CAGR of 9.7% over the forecast period 2024 to 2031.

Key players operating in the B2B payments transaction market include 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.

Key Takeaways
Key players: The growing investments by payment providers like Mastercard, Visa, and PayPal in digital payment innovations are driving the adoption of electronic payment methods in B2B transactions.

Key opportunities: The need for faster payment settlements and working capital optimization is prompting businesses across industries to switch from paper-intensive checks to digital payment rails.

Technological advancements: Technologies like blockchain, Application Programming Interfaces (APIs), and instant payment rails are enabling new use cases in virtual accounts payable, cross-border B2B payments, and supply chain financing.

Market Drivers
Digitalization is enabling payment automation and straight-through processing of B2B Payments Transaction Market Size. By reducing manual intervention and paper-intensive processes, digital methods improve operational efficiency of accounts payable and accounts receivable processes for businesses. This is a key factor accelerating the uptake of electronic B2B payment methods like bank transfers, cards, and instant payment platforms.

Current Challenges in B2B Payments Transaction Market

The B2B payments transaction market is experiencing high processing costs. Manual intervention is required for invoice and payment reconciliation which increases costs. Multiple payment methods used by buyers and sellers also increases complexity. Lack of standardization across payment formats leads to delays and errors in payment processing. Security of financial data during transactions is also a challenge due to increasing cyber threats. Adopting emerging technologies like blockchain for seamless transactions presents integration challenges.

SWOT Analysis
Strength: Streamlined payment processes reduce costs. Digital payment options offer convenience.
Weakness: High initial investment in digital infrastructure. Dependence on technology exposes to cyber risks.
Opportunity: Growth in digital transactions driven by changing buyer demands. Emerging markets offer new opportunities.
Threats: Stiff competition from fintech startups. Compliance to dynamic regulations increases compliance costs.

The B2B payments transaction market in the United States holds the largest share currently, backed by high digital adaptation. China is emerging as the fastest growing regional market driven by a large enterprise base, expanding e-commerce and support for digital technologies by the government.

Europe is another major geographical region concentrating large market value currently. Countries like the UK, Germany and France dominate the European B2B payments market. Growing cross-border trade amongst European countries and support for fintech innovators is fueling market growth in the region.

1.Source: Coherent Market Insights, Public sources, Desk research
2.We have leveraged AI tools to mine information and compile it