B2B Payments Market Trends

Growth Drivers

• Increasing digitization in developing economies: Rapid industrialization and adoption of advanced technologies, including mobile payments, fintech solutions, and e-commerce platforms in developing economies is steadily transforming the payment processes, making B2B payments more efficient. For instance, there has been substantial growth in B2B payments in India. As per Reserve Bank of India’s Digital Payments index increased from 377.46 in September 2022 to 395.58 in March 2023.
• Rapid advances in payment technology: Integration of advanced technologies such as blockchain and artificial intelligence (AI) in payment systems provides more security, efficacy, and transparency in transactions, compared to traditional payment methods. Several companies are investing in blockchain payments. One of the prime examples of this is the launch of a new B2B payment platform with blockchain launched by JPMorgan in November 2023.
  
  Moreover, the use of Internet of Things (IoT) in the B2B payment landscape to automate the payment process through smart contracts, embedded finance, and APIs is fueling market growth. This is rapidly gaining traction as it reduces manual intervention and enhances the payment processes.

Challenges

• Rising concerns about security: The rapid increase in digital payments has resulted in high vulnerability to cyberattacks and frauds. For example, attackers use phishing emails to trick customers into revealing their sensitive information to access payment systems. This is a key factor that can hamper the overall growth of the market in the coming years.

• High cost of advanced solutions and shortage of skilled personnel: Service providers constantly launch software and system updates that many individuals and companies find difficult to cope with as they are unaware of the advanced technologies. This acts as a barrier, resulting in low adoption of advanced B2B payment solutions. Moreover, some technologically advanced payment solutions are costly. Small and medium-scale enterprises might not have enough funds to deploy these solutions.