Increasingly, business-to-business (B2B) commerce is online and global. The steady trend of digitalization of the B2B space continues and has accelerated over the two years of the pandemic.
The shift to online transactions has been fueled by both the demands of pandemic-driven shutdowns and the preferences of millennials, widely seen as the digital-native first generation, steadily making up a larger portion of the workforce. global work.
B2B commerce is also growing globally, with companies seeking to grow by entering new markets. In fact, cross-border B2B transactions account for 26% of annual sales for UK and US businesses, according to Innovating B2B Payments, a collaboration between PYMNTS and i2c.
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Respond to new markets, buyers
Finalizing cross-border payments is often a long process. PYMNTS found that it takes 55% longer for businesses in both markets to receive cross-border payments than in domestic markets. Closing this gap is likely to become more critical for businesses, as cross-border B2B transactions begin to account for a larger share of their chargebacks. Companies are aware of this growing need and are working to adapt their international payments to national speeds.
Businesses also have a strong interest in accessing and delivering innovative payment experiences, such as receiving instant payments and the ability to make digital disbursements. The majority of B2B buyers now expect buying experiences that mirror those of business-to-consumer (B2C) transactions.
Changing B2B buyer preferences, combined with the growth of global B2B e-commerce, appear to be driving the adoption of more innovative payment solutions.
Shift 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 that solution providers will need to carefully consider the benefits of technologies to stay competitive.
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Examining the role of their payment processors and how they can leverage technologies such as artificial intelligence (AI) and machine learning (ML) to reduce friction or speed up payments enables businesses to s strive to accelerate automation. AI can also help businesses better analyze and sort payment data, eliminating tedious manual processes, as well as improve their overall payment processing.
Application programming interfaces (APIs) are also gaining traction as a key technology that will make digital payment processes faster and more efficient.
Modernizing existing infrastructure and manual payment processes through APIs and AI can enable businesses to deliver innovative payment experiences. Using virtual cards for B2B payments can speed up payments and increase security, for example, as these cards generate single-use numbers specifically for companies’ suppliers, thereby reducing transaction risks. They can also enable businesses to be more competitive in the growing global B2B space.