November 11, 2015
LTP research team has come up with a three-page sector snapshot on US Business-to-Business (B2B) Payments Market based on research and insights collected on the B2B payments markets and the participating players.
Across industry segments, more and more businesses are searching for solutions to accounts payables (A/P) and accounts receivables (A/R) processes within standard finance processes of order to cash (OTC), procure to pay (P2P), including additional processes related to sourcing, procurement, invoicing, payments and settlement. Although enterprise resource planning (ERP) systems have automated some of these processes, there is still room for innovation, especially in new-age interfaces and providing end-to-end functionality from sourcing to settlement, including cash management.
The global payments market is estimated at $1.2 trillion of which B2B payments account for $550 billion. A 2014 survey by BOK Financial Corporation showed that there is an increased demand for electronic payments including P-Cards:
The snapshot analyzes the established and emerging players of B2B Payments marketplace.
B2B payments have been known to be inefficient and expensive. Customers believe that there is an immense need for streamlining of settlements and reconciliation of business commerce. The current challenges are poor working capital optimization, zero cash visibility and friction in buyer-supplier relations.
The small to large businesses face varied challenges, including processes related to e-invoicing, payment settlement, working capital and cash management. The market players address the payments and settlement functions, like managing companies’ payees or suppliers directly, including providing other services such as payment gateways, payee management and payment processing. These market players address specific aspects for the procurement and supply chain finance processes, including managing payees (bank accounts, payee details, etc.) working capital arrangements, dynamic discounting, factoring, e-invoice management, payments settlement (initiating payments, disbursing payments and reconciliation), in addition to related tax, regulation and compliance processes.
Also, there are companies that are coming up with innovative invoice solution for problems such as poor working capital, zero-cash visibility and friction in buyer-supplier relations. Some of the innovative invoice solutions offered by the B2B payment companies include pre-financing of invoices, invoice discounting and SME financing.
According to the three-page sector snapshot by LTP, new market players are providing solutions pertaining to:
1) Factoring: Allows the sale of invoices directly to the market player or to a group of investors
2) Working capital marketplaces: Allow buyers and sellers dynamic discounting, allowing early payments
3) E-invoicing: Allows companies to create invoices on-line along with automated routing to payees
4) Supply chain finance: Provide more end-to-end payments processes between companies, whether buyers or sellers
Table of Contents:
1. B2B Payments Marketplace – Industry Statistics
2. B2B Payments Marketplace – established and emerging players
3. Technology trends in B2B Payments Marketplace
4. Business Trends in B2B Payments Marketplace
5. Regulations in B2B Payments Marketplace.