Financial Technology
B2B Payments Platforms Are Prospering But What About Its Challenges?
By TechDogs Bureau
Updated on Wed, Jun 7, 2023
The most vital element that any business needs to survive!
It’s no surprise that they look for quick transfers and easy financial management, especially when they deal with other businesses. #B2BFinance
This is why the last few years have seen big growth for B2B payments, going from $900 billion in 2021 to a forecasted value of $1.6 trillion by 2028! In fact, it’s believed that B2B e-commerce figures will eclipse B2C metrics by 5 times by 2023.
Looking at this, many B2B payment platforms are finding more funding to expand their operations. Recently, Amsterdam-based B2B payments platform Sprinque raised $21 million in debt funding to expand their pay-by-invoice solution throughout Europe, which could bring up to $214 million in transactions per year.
Ahead of this, Vartana raised $20 million in funding. The company offers a dedicated enterprise checkout platform designed for B2B software and hardware purchases which offers unique solutions that help streamline B2B sales closing and financial process.
According to Luke Trayfoot, Chief Revenue Officer of Mangopay, “People are looking for ways to optimize their businesses ... They’re trying to reduce costs and increase growth at the same time — and technology helps enhance that.”
Furthermore, he believes that there is more demand for digital wallets, saying, “[Businesses] want the ability to hold money in, for lack of a better phrase, an escrow kind of capability … They’re trying to build that relationship, and so the B2B platform needs to be the trusted source to hold those funds.”
However, despite so many solutions on the market and high demand of payment platforms in the B2B payments space, there are a range of challenges that businesses face in digitizing in the process.
Primarily, businesses face issues of high transaction fees, which cut into their profit margins and can result in huge amounts for businesses with high volumes of transactions. #B2BChallenges
Another major issue of why businesses consider keeping with traditional payment methods is that of cyberattacks and fraud in the digital payment space. In fact, reportedly, over 80% of organizations report being targets of attempted or actual payments fraud attacks.
Furthermore, payment delays witnessed in the process create major problems for operations and keeping business processes flowing. Also, it can lead to cash flow issues and strained relationships with vendors. Moreover, payment reconciliation processes can be time-consuming and error-prone, especially when dealing with high transaction volumes.
Additionally, B2B payment platforms offer limited payment options, which can affect companies with unique payment requirements leading to other financial challenges. Also, the lack of real-time payment visibility could make it tougher for businesses to identify issues.
According to a report, 90% of businesses have problems dealing with exchange rates in B2B payments, while 95% said their global expansion efforts could increase if there were easier ways to deal with exchange rates.
Do you think B2B payment platform providers can keep pace with the demands? Will the B2B payments space continue its upward trajectory or fail to deliver? Let us know in the comments below!
First published on Wed, Jun 7, 2023
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