B2B players globally have become more open to digital payments during COVID-19: new yStats.com report.
The latest publication from Germany-based online research firm yStats.com, “Global B2B Payment Market and Trends 2021” provides insights into the current state and advances of the business-to-business payment markets across the globe. Among other findings, the publication reveals that as B2B payments have experienced a major transformation due to the pandemic, business-to-business transactions are becoming increasingly digitalized.
B2B payment industry was driven to digitalize during COVID-19
The fact that the digitalization of business-to-business payments is important was understood by many players even before the pandemic. However, as the B2B industry is more resistant to changes than B2C, especially when it comes to investing in technologies that may not directly result in output growth, the process of digitalization has been slow. However, the ongoing COVID-19 pandemic clearly increased the speed of the transformation, both based on the buyer’s willingness to decrease human interaction and the growing digitalization of the providers who increasingly started offering alternative payments methods amid the health crisis. This is likely to result in the whole chain of changes in the payment arena in the near future, according to the new yStats.com report. For example, currently, instant payments hold a rather marginal part of total B2B payments, however, by 2022, the share was forecasted to increase by three percentage points. Whilst this change may seem to be insignificant, for B2B players specifically, this is a major step, as they usually have long-established relationships with their customers and are not prone to changes. Furthermore, in just one year, the share of B2B companies that make over 90% of their payments electronically rose by twelve percentage points, reaching about one-fourth of the total B2B payments value in 2020.
Digital transformation of B2B payments faces challenges
Turning back to the present moment, traditional bank wire transfers still lead the B2B payment market. They are followed by bank debit and cheques. In the B2B E-Commerce arena, however, credit cards topped the 2020 ranking, together with terms (30-60-90), and mobile wallets. Meanwhile, as the companies became more open to alternative payment methods, the transition of B2B payments from these traditional to digital comes together with some challenges, such as a struggle to identify a solution that fits the industry, security concerns, lack of technological solutions, etc. With that, the top payment investment priorities for surveyed B2B companies were cash flow forecasting, Application Programming Interfaces (APIs), accounts payable automation technology, and bank portals & payment services, as detailed in the yStats.com publication.