More and more, business-to-business (B2B) commerce is going online — and going global. The B2B space’s steady trend toward digitization is continuing and has accelerated over the two years of the pandemic.
The move to online transactions has been fueled by both the requirements of pandemic-driven shutdowns and the preferences of millennials, widely regarded as the first digital-native generation, steadily accounting for greater portions of the global workforce.
B2B commerce is also expanding globally as firms look to grow by moving into additional markets. In fact, cross-border B2B transactions account for 26% of U.K. and U.S. businesses’ annual sales, according to “Innovating B2B Payments,” a PYMNTS and i2c collaboration.
Get the report: Innovating B2B Payments
Responding To New Markets, Buyers
Finalizing cross-border payments is often a lengthy process. PYMNTS found that it takes 55% longer for firms in both markets to receive cross-border payments than in domestic ones. Bridging that divide is likely to become more essential for firms as cross-border B2B transactions begin to account for a greater share of their outstanding payments. Companies are aware of this growing need and are working to bring their international payments up to domestic speeds.
Firms also have significant interest in accessing and offering innovative payment experiences, such as receiving instant payments and being able to make digital disbursements. The majority of B2B buyers now expect purchasing experiences that mirror those of business-to-consumer (B2C) transactions.
The shifting preferences of B2B buyers, combined with the growth in global B2B eCommerce, appear to be boosting the adoption of more innovative payment solutions.
Moving to Automation, Digital Wallets and Virtual Cards
Many companies are turning to emerging technologies such as automation, digital wallets and virtual cards to meet these changing demands. This means solution providers will need to carefully examine the technologies’ benefits to remain competitive.
Examining the role of their payments processors and how they may be tapping technologies such as artificial intelligence (AI) and machine learning (ML) to reduce frictions or accelerate payments allows companies to strive for faster automation. AI can also help firms better analyze and sort payments data, thereby eliminating cumbersome manual processes, as well as enhance their payment processing overall.
Application programming interfaces (APIs) are also gaining traction as a key technology that will make digital payment processes swifter and more efficient.
Modernizing legacy infrastructure and manual payment processes via APIs and AI can allow businesses to offer innovative payment experiences. Utilizing virtual cards for B2B payments can speed payments and add security, for example, as these cards generate single-use numbers specifically for businesses’ vendors, reducing transaction risks. They can also enable firms to more successfully compete in the expanding global B2B space.