Global spend on B2B cross-border payments is expected to exceed $40trn by the end of 2024, rising from $27trn in 2022, according to a report from Juniper Research.
It claims this $3trn growth will be driven by the rising popularity of e-commerce marketplaces, which allows merchants to sell products internationally.
Its finding comes from the new ‘B2B Payments: Key Opportunities, Segment Analysis & Market Forecasts 2022-2027’ report.
Juniper Research defines a cross-border B2B payment as any payment between businesses for goods or services made internationally; irrespective of the different payment methods involved.
It stated that while these cross-border transactions have been typically slow, expensive and difficult to track, a rise of cross-border instant payments services is solving this issue. These instant payment solutions can have a transaction completed in ten seconds or less.
While there is a rise in cross-border B2B payments and the e-commerce payments market, there are some challenges firms need to address. Juniper stated that the marketplace model involves multiple vendors all paying each other at different times and in different ways. This creates complexity and difficulties in reconciliation, foreign exchange and fraud prevention.
Due to this, Juniper recommends that B2B payment vendors offer features such as integrated virtual cards and virtual IBANs for local payments, to correctly address these challenges.
Research co-author Nick Maynard added, “While cross-border instant 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 up national instant payment schemes.
“This can unlock substantial improvements for B2B transactions. B2B payment vendors must be driving further integration of the instant payment rails they support on a national level to solve the difficult challenges with legacy payment channels.”
Another recent report from Juniper found that global software spend on financial crime prevention tools will exceed $28.7bn by 2027, up from $22.1bn in 2023.
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Source: fintech.global