B2B Payments

The Ups And Downs Of B2B Mobility, SME Lending & Supplier Payments

The economy is all about ups and downs, and in the world of B2B, those fluctuations give rise (and fall) to some interesting patterns. Last week there were peaks and valleys in the areas of B2B mobility, small business lending and supplier payment timelines, and PYMNTS takes a closer look at the numbers.

Up: B2B Mobility

On the upswing is the use of the mobile device in B2B. The industry isn’t entirely sure what role the smartphone and tablet will play in B2B payments and commerce, but a new infographic from Usablenet published last week may convince some of the naysayers that smartphones and tablets are actually on tap to change the game.

The data, which stems from a slew of research from Forrester and other analysis, visualizes the state of mobile in B2B commerce today. With eCommerce already expanding for B2B, researchers found that the mobile device is playing an increasingly important role in this trend. For 70 percent of B2B marketers, one-quarter of their search traffic comes from a mobile device. For more than one-fifth of B2B brands, mobile is the top driver of their revenue.

This year, 97 percent of B2B firms said they will increase their spending on mobile marketing.

More than half (56 percent) of B2B buyers said they frequently access a supplier website through a mobile device, while nearly a quarter (24 percent) said they have made a mobile purchase.

If that isn’t convincing enough, take a look at Apple.

The technology giant’s CEO Tim Cook unleashed a few figures about the worth of the enterprise to his conglomerate. It turns out that corporate customers of Apple products and services made up about 14 percent of Apple’s revenue in the last year or so, or about $25 billion — hardly a number to scoff at.

“This is not a hobby. This is a real business,” said Cook in an interview about the rising enterprise customer base for Apple.

Up: P2P SME Finance

Also on the rise is the use of P2P financing for corporate borrowers. New stats from the Centre for Economics and Business Research found that in the U.K., corporate P2P lending will hit more than $18.7 billion by the end of the decade — a tenfold increase from the $1.8 billion recorded in 2014.

Still, researchers noted that the $18.7 billion figure, though impressive, is dwarfed by the volume of business financing lent by traditional banks.

Up: Invoice Days Outstanding

Not all rising numbers are a good sign.

For example, there’s the number 90. It’s the number of days, on average, it took Amazon to pay suppliers in 2014, and it’s 50 days longer than Walmart took and even 60 days longer than Costco took, according to the latest stats as outlined in a recent BloombergView report. Those timelines mean Amazon was able to secure a negative 24-day cash conversation cycle — meaning, on average, the corporation got paid by customers 24 days before it paid suppliers.

Down: SME Trade Finance

Some numbers go up, and some numbers go down. Landing in the latter category is the number of small businesses that gain access to trade finance from banks.

New research from the International Chamber of Commerce Banking Commission, in partnership with the Dubai Chamber of Commerce and Industry, found that across the globe, the majority of trade finance rejections by banks are issued to small and medium-sized enterprises.

Data revealed that SMEs account for 53 percent of trade finance rejections. Meanwhile, 79 percent of applications by large corporations for trade financing are accepted, according to reports.

The statistics also found the rising concern of compliance and risk among traditional banks in deciding whether or not to approve of trade financing applications. For instance, analysis found that 46 percent of banks reported ending relationships with clients because of the cost or complexity of regulatory compliance mandates.

In a statement, ICC Banking Commission Market Intelligence Chair Vincent O’Brien said the survey offers a yearly snapshot of global trade financing trends. “This year that snapshot has highlighted the severity of the trade finance gap — which continues to be impacted by regulation, despite the low-risk nature of trade finance — and particularly its impact on SMEs,” he said.

To recap: Mobility is on the rise for B2B players, as is the use of alternative lending sources for U.K. small businesses. But small businesses also saw some dips in the latest B2B stats: Fewer small businesses are accessing finance, and the rise in Amazon’s supplier payment terms means fewer small Amazon suppliers are getting paid on time.

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