No matter where you look — no matter who’s doing the quantifying — the consumerization of B2B is both a massive undertaking and, for the providers who get it right, a lucrative one.
Earnings season has been a check-in on the state of change in commercial payments, as well as a harbinger of what’s to come in an environment that strives to move to a direct-to-consumer (OK, perhaps make that direct-to-commercial entity) interaction. Searching, browsing, buying and checkout in this case become (ideally) streamlined, with the potential to change verticals that have been less than efficient when matching buyers and suppliers through traditional channels.
In the latest spate of commentary, Shopify stands out. Management commentary and earnings materials this month showed that B2B-related gross merchandise volume in the fourth quarter was up 150% year on year, doubling throughout 2023.
B2B on Shopify, according to the company’s website, enables businesses to sell wholesale, with features including vaulted credit cards, payment reminders sent to buyers, and discounted pricing extended to wholesale customers. Shopify Payments can be used to process the payments, with the same back-end flows that are already tied to an enterprise client’s online storefront.
During a conference call with analysts, Shopify President Harley Finkelstein said “B2B is still very new,” adding that “we’re beginning to see ‘B2B exclusive’ merchants come on [to the platform] … we are building on our commitment to help merchants sell to all of their customers from a single, unified commerce platform with upgrades to our B2B offering, including headless B2B storefronts and support for sales reps in the admin, among others, as we look to establish our B2B offering as a leader in commerce.”
In terms of the market size, Finkelstein said during the call that the total addressable market for offline and B2B is estimated at more than $450 billion.
Amazon, meanwhile, remains firmly in the sights of firms like Shopify. eCommerce procurement platform Amazon Business has 6 million customers, which tend to be smaller firms, and spans everything from business-specific pricing on items to underwriting credit.
Visa noted in its earnings results in January that commercial payments volumes in the most recent quarter were up 8% in constant dollars.
Visa CEO Ryan McInerney said on a conference call with analysts that new payments flows overall — including B2B — represent a $200 trillion opportunity. For the payments networks, the movement beyond cards continues through the likes of Visa Connect, which facilitates bank-to-bank cross-border transactions.
Visa said this week that Visa Commercial Pay now enables financial institutions to add virtual corporate cards to the digital wallets of their clients’ employees.
And last month, Mastercard said it partnered with TreviPay to streamline invoicing, allowing businesses to offer net terms or trade credit financing, as well as SKU-level invoicing.
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