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B2B payments on the cusp of a digital boom

Cross-border business-to-business remittances are bound to rise over the years with the direct increase of domestic and international trade

B2B cross-border payments are expected to cross $35 trn in 2022 The usual timelines for bank trade transfers range anywhere between 48 hours to 7 days We’ve reached the tipping point where checks are becoming obsolete on a broader scale

Praveen Chandiramani, Founder & CEO of WorkerAppz Payments, wrote in an opinion that remittances and money transfers have always been synonymous with expats sending their hard-earned money back home at the month with the total volume expected to touch $1 trillion over the next 5 years in emerging and developing nations.

However, what has always been left to traditional channels is cross-border corporate (business-to-business) remittances which are bound to rise over the years with the direct increase of domestic and international trade. 

As per recent research by Ripple, cross-border SME business-to-business payments are a $10-15 trn dollar market that is highly untapped and quite a hit on a company’s profitability. In addition to this, a study inferred that B2B cross-border payments are expected to cross $35 trn in 2022 after a COVID-related low of $27 trn in 2020. 

“There is an increasing demand for solutions that subsidize the cost of corporate remittances while maintaining the speed at which the funds are credited to the beneficiary’s bank account.”  

The usual timelines for trade transfer range anywhere between 48 hours to 7 days and are highly-priced at almost $50-$60 per transaction which is extremely unreasonable in today’s extremely competitive era. 

“To disrupt this space, we craft our solution and business model to bring down the cost of such trade transfers to as low as $15 per transaction and credit within 24 hours.”

“A corporate remittances platform like ours integrates with banks’ current platform through APIs and enables these institutions to provide their corporate clients seamless & fully AML-compliant B2B remittance services,” added Praveen Chandiramani. 

Read: B2B marketplaces: Big business going places

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Global B2B payments

Globally there are 176 B2B remittance companies, of which we mention two prominent ones:

1- Payoneer, a cross-border payment platform for B2B transactions. Its payout options include transfers to the local banks, prepaid debit cards, international wire transfers, and local eWallets. It offers businesses an end-to-end solution to get paid, bill their clients, pay VAT, pay suppliers, and withdraw international earnings in USD to the local bank account. Its app is available for both Android and iOS devices.

2- Ebury, a corporate cross-border payments and growth lending services company. It features international payments, FX risk management, import lending, multi-currency accounts, payment and beneficiary management, API for ERP and treasury management, bulk payments, and others.

End of checks

With businesses adopting digital payments at a more significant rate, it feels like we’ve reached the tipping point where checks are becoming obsolete on a broader scale.

As organizations pay more suppliers by automated clearing house (ACH) credit, they also realize the true cost of ACH payments and the risks around them. At 25-50 cents per transaction, ACH looks cheap, but when you consider the time, expense, and liability of supplier enablement, the real cost ends somewhere between $1.40 and $3.79, similar to what it costs to process a check. 

And that doesn’t include the cost of fraud prevention. ACH payment fraud is on the rise where scammers pose as vendors and convince Account payable (AP) teams to send ACHs to fraudulent bank accounts as banks often struggle to offer fraud protection for this payment type simply because check fraud was the main focus for so long.