As the dust settles on a transformative year in B2B, 2024’s advancements hint at a future where B2B payments become more seamless, intelligent and integrated.
Digital innovation rewrote the rules of enterprise-level commerce this year, as businesses embraced technology to streamline workflows, enhance security and adapt to evolving customer expectations.
Among the key trends that reshaped B2B buyer and supplier dynamics this year were the rise of digital marketplaces, the embrace of automation and artificial intelligence across accounts payable (AP) and accounts receivable (AR) workflows, real-time payments, and the surging use of virtual cards.
As these trends converge, the marketplace emphasis on digitization and the mitigation of paper-based payment methods, security and seamless user experiences is likely to intensify. Businesses will likely continue to prioritize B2B innovations that not only simplify operations but also enhance trust and collaboration between buyers and suppliers.
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Digital marketplaces are no longer the fringe players they once were. Platforms like Alibaba and Amazon Business have demonstrated the power of streamlining procurement and payment processes for enterprises.
PYMNTS tracks the rise of digital B2B marketplaces across various industries, even including the U.S. government, noting that these platforms encompass a broad swath of B2B innovation, from embedded payments to AI-powered procurement and the broader digitization of traditionally manual B2B processes.
These marketplaces streamline procurement processes, offering transparency, enhanced supplier discovery and robust analytics. The ability to integrate payment solutions directly into these ecosystems has further helped eliminate friction, facilitate faster transactions and improve cash flow visibility. Additionally, marketplaces can serve as a springboard for cross-border trade by addressing complexities such as compliance and currency conversion.
What does this mean for B2B payments? First, the lines between procurement and payments are blurring. Enterprises demand seamless, end-to-end solutions that combine purchasing, financing and payment reconciliation in a single interface. Second, the rise of marketplaces is accelerating the need for interoperability between payment systems.
See also: Into the Nitty-Gritty: How, Why and Where Automation Optimizes B2B Payments
While the PYMNTS Intelligence report “Getting Paid: Digital Payments for Improving Cash Flow and Customer Experience” found that 75% of companies still use paper checks, the days when AP and AR teams were bogged down by manual processes and paper invoices are increasingly receding into the past. Automation and AI are revolutionizing these workflows, helping deliver efficiency and accuracy.
Machine learning algorithms can analyze payment histories to forecast cash flow and identify potential bottlenecks, while AI-powered tools can work to scan, categorize and process invoices in seconds, reducing human error and speeding up payment cycles.
These advancements not only streamline back-office operations but also free up resources for strategic initiatives. The PYMNTS Intelligence report “Why Automating Both AR and AP Is Vital to Fiscal Fitness” found that as companies seek to improve their financial health, automating AP and AR is becoming a key strategy. Automation, for its part, works to streamline accounting, strengthen security and improve B2B relationships through improved visibility and efficiency.
Read also: Cutting the Checks: Boosting Commercial Payment Speed and Security With Virtual Cards
One of the biggest stories of 2024 was the growth in the use of virtual cards for B2B payments. Unlike traditional payment methods, virtual cards offer a combination of efficiency, security and control.
The rise of virtual cards is also helping to drive innovation in payment analytics. Businesses can use the granular data provided by virtual card transactions to optimize spend management and identify cost-saving opportunities.
At the same time, real-time payments are increasingly reshaping the expectations of speed and transparency in B2B payments. As real-time payments become more widespread, companies will need to retool their treasury systems to handle the increased velocity of transactions. Integrating real-time payment capabilities into existing workflows will be a key challenge —and opportunity — for payment providers.
Still, as we look to 2025, key industries remain tethered to legacy B2B payments. The PYMNTS Intelligence report “The Great Paper Escape: Transforming Accounts Payable for the Digital Age” found that the construction industry leads in paper-check use, with 76% of subcontractors paid this way. Real estate (21%) and retail (15%) also maintain reliance on paper checks for B2B payments. In other words, even as digital payment options multiply, sizable segments of the economy still have their B2B payments firmly anchored in the last century’s payment methods. The question is not whether they will modernize but whether they will remain competitive when they eventually must do so.
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The post How Buyers and Suppliers Rewrote the Rules of B2B Payments in 2024 appeared first on PYMNTS.com.
