Finding 01: Growth-Hungry Companies May Be Moving Away From Paper Checks
In 2023, a separate cross-industry study conducted by Precedence Research valued the global B2B payments market at over $1.4 trillion. According to the study’s authors, that figure could more than double by 2033 to an annual $3.5 trillion.
Despite this predicted surge, innovation in B2B payments has been slower to take off compared to the consumer payments (B2C) space where transactions are often simpler, smaller and lower-risk, says Marie-Claude Nadeau, partner and lead for McKinsey’s global payments consulting business. Adoption of new payment methods has been particularly slow for U.S.-based companies, she says: “There are parts of the world where checks are no longer used in B2B payments, but the U.S. is still a very check-heavy geography.”
Companies have an opportunity to operate with more agility and stride past peers, she says, by shifting away from manual processes and adopting the digital capabilities already common in the B2C space—contactless payments, embedded “buy now” buttons, biometric authentication, for example—that make transactions quick, frictionless and more fraud-proof.
of respondents agreed traditional payment methods are sufficient to achieve business goals
Source: 2024 Forbes Insights Survey commissioned by American Express
5%
Finding 02: Prioritizing End Users Sparks A Shift From Manual Methods
What’s motivating leaders to evolve beyond conventional transaction processes? Our study underscores how an emphasis on customers is helping to redefine the next chapter of B2B payments and inspiring investment in the simple, streamlined and secure user journeys already common in the B2C space.
Surveyed leaders said enhancing customer experience and satisfaction through seamless payment processes is the leading incentive for implementing new payment technologies to support business growth, with efficiency and security following close behind.
“We used to talk about enterprise-grade solutions,” Nadeau says. “Now we talk about consumer-grade solutions.” Companies want something intuitive and effortless for their customers and employees, such as peer-to-peer platforms, embedded solutions and card payments.
To enhance customer experience
Source: 2024 Forbes Insights Survey commissioned by American Express
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Top Three Reasons Leaders Are Pursuing Payment Innovations
2
To improve operational efficiency
3
To strengthen security
Source: 2024 Forbes Insights Survey commissioned by American Express
of leaders cited evolving payment solutions* as the top trend shaping B2B payments in the next 18 months
*Includes digital omnichannel payments, integrated experiences, embedded payments, biometric solutions, contactless interactions and buy-now-pay-later options
76%
As businesses race to create those user-friendly experiences described above, what specific technologies are they adopting?
Respondents point to omnichannel options that integrate payments across different environments (online, in-store or over the phone) as well as embedded payment models which enable seamless transactions within non-financial applications.
Embedding payment features in non-financial apps can allow users to conveniently incorporate invoicing directly into their workflows. Contactless interactions, biometric solutions and buy-now-pay-later financing can provide similar efficiency and ease.
Credit cards (plastic or virtual) are more common in B2B transactions as organizations prioritize customers and risk management, Nadeau says. “With virtual cards you can generate a new credit card number for each recipient and have a high level of security with each transaction—particularly if you've never transacted with that party before. It’s a very easy and safe way to make that first transaction.”
Respondents selected AI as the number-two trend shaping B2B payments (after evolving payment solutions). AI-powered platforms could help automate invoicing, capture data to validate purchase orders and reduce complexity in cross-border payments involving different currencies, banking models and regulatory requirements.
Finding 03: Solutions That Can Help Make Transactions A Breeze Are In Hot Pursuit
of respondents said advanced fraud prevention is the most important feature for navigating the future of the payments
71%
Security is paramount for business leaders as they implement new payment tools, and they’re looking to AI to help fraud-proof their transactions.
“B2B fraud is particularly tricky because it can be high-value and low-volume,” Nadeau says. “That's much harder to deal with than high-volume, low-value where there are lots of data points to detect potential fraud.” There can also be more susceptibility in business payments because criminals could target a vast range of accounts and employee log-in details through phishing attacks, she explains.
AI-based security solutions can help safeguard payments by tracking vendor behavior, analyzing transaction data in real-time and detecting anomalies that indicate suspicious activity. At the same time, AI could exacerbate the scope and sophistication of fraud threats. Since B2B payments could be a target for theft and criminals may use intelligent tools, organizations may need to invest in cutting-edge payment technologies that enhance cybersecurity and mitigate risk.
Finding 04: Companies Explore B2B Innovation & AI Opportunities
Source: 2024 Forbes Insights Survey commissioned by American Express
Source: 2024 Forbes Insights Survey commissioned by American Express
of leaders agreed that transforming B2B payments can’t happen without implementing new ways of working and collaborating
80%
Leaders recognize organizational adjustments are essential to transformation, but many struggle to start.
Given the arena of B2B payments still leans on legacy models and mindsets, companies could capture business ROI when they earnestly commit to building a change-ready organizational foundation and adopting new payment platforms and technologies from there.
Nadeau says to seize the benefits of digital payments—which can help lower transaction costs, provide more cash flow control and deliver better customer experiences—start with culture and collaboration: “Innovation involves many people changing the way they work and interact with each other.”
Finding 05: Cultural Change May Unlock Innovation Wins
Marie-Claude Nadeau Partner & Lead, Global Payments Consulting, McKinsey
In B2B payments, we used to talk about enterprise-grade solutions. Now we talk about consumer-grade solutions.”
