February 8, 2023

B2B Payments Trends and Projections 2023

The B2B payment industry has traditionally been slow to adopt new technologies, but in recent years, there has been a significant push toward digital transformation in the sector, driven by the need for faster and more efficient payment processing. 

As part of our B2B Payments analytics project, we began by aggregating statistical information starting with this article, and then The State of B2B Payments in Africa Report.

B2B Payments: A Brief Overview

B2B (business-to-business) payments refer to transactions that occur between two businesses. These payments are usually larger and more complex than consumer payments, involving invoices, purchase orders, and various payment methods, including transfers, cross-border transactions, and virtual card payments. 

The B2B payment industry has traditionally been slow to adopt new technologies, but in recent years, there has been a significant push toward digital transformation in the sector, driven by the need for faster and more efficient payment processing. 

This has led to the rise of FinTech companies offering B2B payment solutions that aim to streamline the payment process and reduce manual errors and fraud.

The market for B2B payments was estimated to be worth approximately $903.50 billion in 2021 and is anticipated to reach $1,618.15 billion by 2028 with a CAGR of 10.20%. 1

Which trends will shape Nigerian B2B payments in 2023? Let’s take a look at some major factors that will impact how organisations transact with one another.

B2B Payments Trends to Look out for in 2023

1. Integrated Payment Processing & Automation 

This refers to the integration of payment processing within a company’s systems and operations. The idea is to streamline and automate the payment process, making it more efficient and secure. 

By moving their payment data to the cloud, businesses can access this information from anywhere and process payments faster. The rise in cloud-based Account Payable solutions will mean increased automation. 

In 2022, the cloud-based accounts payable software market was valued at USD 2727.89 million and it is projected that the market will grow at a CAGR of 7.8%, reaching USD 4280.94 million by 2028.2

2. Team Cards

Team cards are shared payment cards that are designed for businesses. These cards can be used by multiple team members, and the expenses can be tracked and managed centrally. This helps companies better manage their expenses, control budgets, and simplify bookkeeping. 

Globally, the cards & payments market is expected to grow by 8.4% between 2022 and 2023 to $903.22 billion.3

In January 2023, CBN in collaboration with NIBSS launched the National Debit Card. With Nigeria being 6th in the world’s most developed real-time payments markets,3a it would be interesting to see how this progresses with B2B card payments.

3. Supply Chain Financing &  BNPL (Buy Now Pay Later)

This involves financing the purchase of goods and services by a company, typically from its suppliers. By improving supply-chain financing, companies can improve their cash flow, reduce the need for capital, and support the growth of their suppliers.

BNPL is a payment option that allows customers to purchase goods or services and pay for them later in installments, without incurring interest or fees. This type of payment solution is becoming increasingly popular, particularly for online purchases, as it allows customers to make a purchase without having to pay for it upfront.

It is estimated that by 2027, the number of users of BNPL (Buy Now Pay Later) is expected to reach 900 million – a 157% increase from 360 million in 2022. 4

4. Expansion of Cross-Border Payments and Digital transformation in global trade

With globalization and the increasing number of international trade relationships, the demand for cross-border payments is expected to grow. B2B payment providers will need to offer solutions that can handle the complexities of cross-border transactions. B2B Cross-Border Payment transaction values to exceed $42 trillion In 2026. 5

5. Paperless and Frictionless Remittances + Real-time invoicing and reconciliation

By eliminating the need for paper-based invoices and payments, B2B transactions can become faster, more efficient, and more secure. With real-time invoicing and reconciliation, companies can reduce the time it takes to process payments and improve the accuracy of their financial reporting. 

The use of digital payment methods is expected to continue growing as businesses look to automate their payment processes and reduce the use of paper-based methods. 

As of 2021, the digital payment market was valued at US$ 89,045.67 million; by 2028, it is expected to grow to US$ 243,426.71 million. 6   In the same vein, the Real-Time Payments Market is to Rise at an Impressive CAGR of 32% to Reach $86.89Bn by 2028. 6a

B2B Payments Trends 2023 Duplo

6. APIs and open banking platforms

APIs (Application Programming Interfaces) and open banking platforms allow B2B payments to be integrated into other systems and processes, such as accounting software and e-commerce platforms. This makes it easier for businesses to automate their payments and reduce the time and resources required to process them.

The open banking market reached USD 15.21 billion in 2022 and is set to hit USD 131.3 billion by 2028, growing at a CAGR of 24.6% during the forecast period (2022 to 2028).7

7. Data-driven Decisions for CFOs

By leveraging data, companies can make informed decisions about their payments and improve their financial management. This could include identifying trends, reducing fraud, and making more efficient use of their resources. 8

8. Artificial Intelligence and Machine Learning 

AI and machine learning can be used to automate various aspects of the B2B payments process, such as fraud detection and risk management. These technologies can help companies to save time and eliminate human errors. Thus, speeding up the process as well as reducing the risk of fraud, and improving their bottom line. 

FinTech is expected to invest $22.60 billion in AI globally by 2025, growing 23.37% annually.9

Snapshot of Trends:

  • The market for B2B payments was estimated to be worth approximately $903.50 billion in 2021 and is anticipated to reach $1,618.15 tillion by 2028 with a CAGR of 10.20%. 
  • In 2022, the cloud-based accounts payable software market was valued at USD 2727.89 million and it is projected that the market will grow at a CAGR of 7.8%, reaching USD 4280.94 million by 2028.
  • B2B Cross-Border Payment transaction values to exceed $42 trillion In 2026.
  • The open banking market reached USD 15.21 billion in 2022 and is set to hit USD 131.3 billion by 2028, growing at a CAGR of 24.6% during the forecast period (2022 to 2028).
  • It is estimated that by 2027, the number of users of BNPL (Buy Now Pay Later) is expected to reach 900 million – a 157% increase from 360 million in 2022. 
  • As of 2021, the digital payment market was valued at US$ 89,045.67 million; by 2028, it is expected to grow to US$ 243,426.71 million.    In the same vein, Real-Time Payments Market is to Rise at an Impressive CAGR of 32% to Reach $86.89Bn by 2028. 
  • FinTech is expected to invest $22.60 billion in AI globally by 2025, growing 23.37% annually.

Learn more: Download The State of B2B Payments in Africa Report.

References:

1Vantage Market Research

2Market Watch

3Business Research Company

3aBusiness Wire | ACI

4Juniper Research (BNPL)

5Juniper Research (Cross-Border Payments)

6Insight Partners

6aFintech Futures

7Skyquest Technology Consulting

8PYMNTS

9Opus Consulting

Guardian Nigeria

Global News Wire

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