Automation drives growth in B2B transaction value: Juniper Research

The global B2B payments market will exceed US$111 trillion in transaction value by 2027, a 26 percent jump from $88 trillion in 2022 according to Juniper Research.

The research reveals that increased automation within B2B payments has led to this growth, such as robotic process automation (RPA) and cloud solutions.

The authors point to automation technologies including electronic invoice capture and invoice automation, simplified invoice approvals, cashflow management and accounting software integration as key methods to lower costs, increase transaction speed and reduce errors in B2B payments.

According to a Juniper white paper on the topic, “Advancements in globalisation and e-commerce, accompanied with the relevant legislation to regulate transactions and protect transacting parties, as well as improvement of domestic and cross-border payment, contributed to the uptake of new digitised methods, especially from the second half of the 2010s onwards.”

B2B payments tend to be higher in value than B2C and are usually recurrent in nature, which presents a huge opportunity for technology vendors that can innovate in this space.

“As the B2B payments space has traditionally been slower in adopting new technologies, particular attention will need to be paid to ensure organisational and systemic problems are addressed in tandem,” the report said.

According to research co-author Nick Maynard, “By leveraging new technologies within the accounts payable and receivable processes, businesses can unlock significant cost savings, which is critical during a time of economic uncertainty.”

A number of value-added services have been introduced to the market to improve the shortcomings of B2B payments, including invoice financing, AP automation and trade finance.

“These are typically aimed at building business capacity to assist them in better managing corporate payments or optimising cashflows, and as such, they provide help in bridging an important gap for businesses,” the report said.

Additionally, the research found that new payment methods including central bank digital currencies (CBDCs) will be leveraged in response to challenges in the sector, due to their digital nature, allowing for full automation and easy traceability.

The report added, "CBDCs must be designed with B2B payment use cases in mind, given that B2B payments are generally more complex than consumer payment processes. As such, B2B payments vendors should participate in trials and pilots to ensure these difficult use cases are considered from day one.”