凱捷-2022年世界支付報(bào)告

WorldReportSeries

Payments

2022

WINNING

WITHSMBs

OPTIMIZINGTECHNOLOGYANDDATA

TODRIVEDEEPENGAGEMENT

2

WorldPaymentsReport2022

CONTENTS

Foreword

Executivesteeringcommitteemembers

Executivesummary

PaymentplayersneedinnovationtowinSMBengagementBoostplatformversatilitytounlockpaymentpotentialPreparetothriveintheageofseamlessvalueexchangeInconclusion

Methodology

PartnerwithCapgemini

3

4

5

6

13

24

31

32

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WorldPaymentsReport2022

3

FOREWORD

Work,shopping,travel,entertainment,services,andcommercealllookabitdifferentfrom30monthsago.Theimpactofglobaleventshassimilarlyreshapedthepaymentsindustryasindividuals,governments,andbusinessesreexamineprioritiesandsuccessstrategies.AfterreboundingfromtheaftereffectsofCOVID-19fasterthanmostsectors,thelong-termprospectsofpaymentsappearsolid,evenasrisingsignsofrecessionchallengeothermarkets.

AswementionedintheWorldPaymentsReport2021,theyear-over-yeargrowthofnon-cashtransactionsistriggeringtheadoptionofnewandalternativepaymentproducts(QRcodes,digitalwallets,andaccount-to-accountpayments)andacceleratingdemandforcross-borderandinstantpayments.

Thisyear’sWorldPaymentsReportexaminesthegrowingimportanceoftheB2Bpaymentsvaluechainandsmallandmediumbusinesses(SMBs)–theglobaleconomygrowthengine.SMBsrepresentanopportunityforpaymentspecialiststocaptureaburgeoningmarket.Yetmanyfinancialinstitutionshaveoverlookedsmallerenterprisestofocusonretailandcorporateaccounts.Andcurrently,SMBsstrugglewithpoorcashflowandlongconversioncycles,whichmaytriggeragrowth-prohibitiveliquiditycrisis.Moreover,duringourconversationswithSMBs,welearnedtheyfeelunderservedbytheirprimarybanks,andnearly90%areconsideringservicesfromchallengerbanksandalternativeproviders(PayTechsandBigTechs).

WebelievebanksandPSPsmustinnovatetheirfront-endB2Cpaymentcapabilitiesandevolvetheirback-officepaymentvaluechainstoretainaleadershipposition.

Thetimingisrightforpaymentfirmstoselectandassemblebuildingblocksinvariouscombinationstosatisfycustomerrequirementsvialayersofservicesandcapabilitiesonacomposable,API-poweredplatform.PlatformupgradesandpaymenthubswilllaythefoundationasbanksslowlybutsurelytransitiontotheISO20022(MX)standardfromtheISO15022messagetype(MT).Thelegacypredecessorwasadequateuntilthepandemicsparkedsweepingdigitalization,withsomebanksexperiencingagreaterthan90%shifttodigitaltransactions.

Further,today’sfinancialregulationsrequirebankstousemoreexacting,data-rich,quicklytrackedmessagingtocomplywithregulatoryrequirements.

ISO20022willharmonizedata-drivenplatformsandconnectpaymentsecosystems,enablingSMBstotakeadvantageofchange-as-you-gopaymentformatsorplug-and-playthird-partyofferings–allnecessarytosustainandfuture-proofbusiness.

Banks’adoptionofthenewmessagestandardiscrucialaspaymentvaluechainsbecomelonger,morecomplex,andnon-linear–andtransactionandinteractionvolumesexplode.Andatthesametime,newtechnologies,suchasdistributedledgertechnologyareemerging.

Tostayinthegame,paymentplayersneedtodevelopcompatiblesystemstointegrateDLT.Thisrequiresfirmstoharmonizedataattechnology,enterprise,ecosystem,andindustrylevels.

Whilewecannotpredicthowdigitalledgerswillultimatelyaffectthepaymentsindustry,theWorldPaymentsReport2022offersoptionsforbanksandPSPstoconsiderbasedontheirappetiteforinvestmentandrisk.Wereviewstrategiesthatmaybolstercoreinfrastructuretoenableindustrycompetitiveness,suchaspartneringwithcentralbankstoexplorecentralbankdigitalcurrency(CBDC).

I’vebeeninthefinancialservicesindustryforaround25yearsandcannotrememberamoredynamicoropportunity-filledtimeforthepaymentssector.IhopeourreportencouragesconversationsamongyourteamsandhelpsyouformulateastrategytomoreeffectivelycapturemindshareandshareofwalletwithintheincreasinglyimportantSMBsegment.

AnirbanBose

FinancialServicesStrategicBusinessUnitCEO

&GroupExecutiveBoardMember,Capgemini

4

WorldPaymentsReport2022

EXECUTIVESTEERINGCOMMITTEEMEMBERS

TheExecutiveSteeringCommitteeMembersforourWorldPaymentsReport2022includedtopleadersandacknowledgedpaymentsindustryexpertsfromacrossbanks,FinTechs,technologypartners,andleadingindustryplayers.Theyhelpedsteerourreportcontentthroughideation,hypothesesrefinement,validationofkeyfindings,andsharingofbestpractices.OurcommitteemembersrepresenttheAmericas,EMEAandAPACtoensureamixofglobalperspectivesandexperiences.

BANKS

BrunoMellado

HeadofPayments&Collection

BNPParibas

MilindKhatavkar

HeadofTechnologyforConsumer

FinanceandCards

DBS

SarthakPattanaik

CIO-DigitalAssets,TreasuryServicesClearance&CollateralManagement

BNYMellon

FINTECHSANDTECHNOLOGYPARTNERS

DorothyCopeland

GlobalHeadof

PartnerEcosystem&Alliances

Stripe

NileshDusane

HeadofInstitutionalPayments

AWS

INDUSTRYBODY

NickKerigan

ManagingDirector,HeadofInnovation

SWIFT

CatherineGu

HeadofCBDCandProtocol

VISA

WorldPaymentsReport2022

5

EXECUTIVESUMMARY

EarnSMBtrustthroughinnovationandengagement

Despiteunprecedentedvolatilityanduncertainty,thepaymentsindustrywasresilientthroughouttheCOVID-19crisis.Digitaladoptionwashighamongcustomersandbusinesses:UoU-c92p在L9U29c在!oU29LeoU在L9c卜在o9cp!e^e916.5%compoundannualgrowth(2021-2026)onthebackofAPACandEuropeanupticks.

Growingdigitalpaymentinfrastructureimprovementsandmaturityhasledtoacceleratedadoptionofinnovativeformats–QRcodes,digitalwallets,andaccount-to-accountpaymentsaresomeexamples.Thishasresultedindemandforstreamlinedcustomerjourneys,anoptimalpaymentsmix(traditionalandnew),andvalue-addedpersonalizedservices.

De2b!在e!UcLe山eU在9(bo2在-b9Uqe山!crecovery,manysmallandmediumbusinessesarestrugglingwithcashflowissuesandslowedbusinessgrowth.

?SMBsbelievetheirprimarybankshaveunderservedthem:nearlyninein10areconsideringamoveasagilePayTechsandBigTechsgainfavor.

?Thesenewerplayersareorchestratingecosystemstobundlecorepaymentserviceswithbothfinancialandnon-financialofferingstogiveSMBsaunifiedvalueproposition.

Buildplatformversatilitytounlockpaymentservicespotential

Legacysystemlimitationsstifleinnovation,yetonlyoneinthreepaymentfirmsarereadytomothballtheirheritagesystems.However,newplatformificationapproachesarenecessaryalongwithcomposability–amodular,responsive,andopen-formarchitecture.Incumbentfirmsc9U!山bLo^e在pe!Lco2在p92e9Uq2beeq在o山9L卜e在whilereducingtheirITfootprintviafuture-proofpaymenthubsbuiltonAPI-based,cloud-nativeopenarchitecture.

Acomposablepaymenthub’seffectivenessdependsonqualitydata:ISO20022isbuilt

oUobeU2在9Uq9Lq29Uq!2cL!在!c9(在oeUp9Uceqplatformvalue.

?Itharmonizesdata,soPSPsoperatemoreefficientlybasedonrich,end-to-end,accurate,andmeaningfulinformation.

?CombiningtheISO20022standardwithapaymenthuballowsincumbenttoboostoperationalefficiencyandreducesettlementdelaysandfalsepositivecases.Harmonizeddataflowenablesseamless,integrated,and2ecnLec(!eU在-在o-p9U卜圖p9U卜-在o-p9U卜圖9Uqp9U卜-to-clientinteractions.

?Itwillalsoallowforintegrationofnew在ecpUo(o?!e2!Uc(nq!U?q!2在L!pn在eq(eq?eLtechnology.

Preparefortheageofseamlessvalueexchange

MorepaymentsexecutiveswillconsiderthepotentialofDLT,butweexpectadoptionratestoremainfairlylevelandbasedoncarefulforethoughtinthenear-tomedium-terms.WeencouragepaymentsplayerstoevaluatetheirowninnovationpotentialandriskaversionwhenconsideringpossibleDLTplays:

?PLAY1:Stayinthegamewithamulti-railfoundation.

?PLAY2:Bolstercoreinfrastructuretoenableindustrycompetitiveness,suchaspartneringwithcentralbankstoexplorecentralbankdigitalcurrency(CBDC).

?PLAY3:BecomeaDLTadoptionfrontrunnerthroughecosystemcollaboration.ScaleDLTusecasesbeyondclosed-loopsystemstocommercializebenefits.Testprogrammableandsmartpayments-relatedDLTusecases(suchastradefinanceandtreasury)andnon-

bankingusecases.

Chooseyourbestplay.Leverageyourlongexperiencealongsideagilityandinnovation在oqe(!^eL2在LoU?eL^9(nebLobo2!在!oU2在o在peincreasinglycompetitiveandalwaysimportantsmallandmediumbusinessessegment.

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WorldPaymentsReport2022

PaymentplayersneedinnovationtowinSMBengagement

Thedynamicpaymentssectorhasbeenaninnovationleaderwithareputationforadaptingquicklytochallenges.Forexample,duringtheheightofthepandemic,theindustryreactedwithlaserfocustobuildaresilientandrobustinfrastructuretowithstandgloballockdowns.Butnow,newtestsemergeasglobaleconomiesdecelerate,whichiswhybanksandpaymentserviceproviders(PSPs)mustmaintainmomentumtoevolvefastandscaleeconomically.

Thepaymentsindustryhasreachedaninflectionpoint

CO^lD-JobLo山b在eqcn2在o山eL29Uqpn2!Ue22e2toweavedigitaltechnologiesintoeverydaylife.Similarly,convenienceboostedtheuseofnon-cashpaymentmethods,especiallyamongconsumers(Figure1).Worldwidenon-cashtransactionsgrowthbetween2022and2026isexpectedtoremainsoftduetotheloomingthreatofrecession.IMFprojectionsforthe2023GDPgrowthratesuggestthatallmajoreconomieswillwitnessslowdown.Coupledwithsignificantlyhighinflationratesandcontinuinggeopoliticalissues,

weforeseearelativelyslowgrowthratefornon-cashtransactionvolumes.

Despitetheslowdown,comparativeanalysisconfirmsthegrowingprominenceofnewpayments(instantpayments,e-money,mobileanddigitalwallets,account-to-account,QRcode)relativetotraditionalmethods.Forexample,in2021,traditionalpaymentmethods(cards,credittransfers,anddirectdebits)accountedformorethan83%ofoverallnon-cashtransactionvolume,whilenewpaymentmethodscomprisednearly17%.By2026,webelievenewpaymentmethodswillmakeuparound28%oftotalvolume,whiletraditionalpaymentmethodswilldroptoabout72%ofoverallnon-cashtransactions.

Therapidadoptionofmobilepaymentshasdriventheacceptanceofinnovativepaymentinstruments,suchasquickresponse(QR)codepayments,tap-and-go(NFC),digitalwallets,andaccount-to-account(A2A)payments.

?Forinstance,anindependentresearchfirmestimatedthatglobalQRcodepaymentusersmayreach2.2billionin2025,upfrom1.5billionin2020,whichsuggeststhatalmost

Figure1.Increasinglymaturedigitalpaymentsinfrastructurefuelsnon-cashtransactiongrowth(volumeinbillions)

Growth

’21–’22F

16.9%

12.7%

9.7%

466.8

1,157.3

7.0%

23.9

65.9

204.4

254.6

690.4

440.6

201620202021E2022F2023F2026F

Sources:CapgeminiResearchInstituteforFinancialServices,2022;ECBStatisticalDataWarehouse,BISStatisticsExplorer,countries’centralbankannualreports.

Note:2021non-cashtransactiondataissourcedfromcentralbanks.Forecasted?gureswereusedwhendatawasunavailable.Figuresareforecastedfor2022andbeyond.

LatinAmerica

NorthAmerica

Europe

12.9%

22.8%

59.8

192.4226.1

346.7

CAGR

’21–’26F

72.2

218.8

286.5

40.7

149.2149.8127.6

42.4

99.3

280.8

78

233.9

Global

12.5%

16.5%

12.1%

25.8%

1,347.7

2,121.6

APAC

8.6%

6.6%

MEA

845.7

480.1

989.4

552.9

315.1

1232.3

30.3

20.6

26.9

12.6

WorldPaymentsReport2022

7

29%ofallmobilephoneusersworldwidewilluseQRcodepaymentsby2025.1

?Similarly,instantpaymentsareontracktoaCAGR(2021-2025)ofaround29%,reaching

428billioninvolume.

?Fueledbyincreasedadoptionofdigitalwallets,eMoneytransactionsareexpectedtowitnessasimilargrowthrateofabout27%duringtheforecastperiod(2021–2026),toreachabout161billioninvolume.By2025,researcherssayuniquedigitalwalletusersgloballywillincreasebyroughlyoneandanhalftimestoreach4.4billion.2

Fromaregionalperspective,newpaymentgrowthishappeningeverywhere:

?APACwilllikelycontributemorethan50%toglobalnon-cashtransactionvolumesby2026,sparkedbythepopularityofmobilewallets.

?IntheMEAregion,anexpandingtech-savvypopulationcoupledwithincreasingsupportfromthegovernmentisenablingthetransitiontodigitalpaymentsintheforecastperiod.

?ConsideringthatTCH(TheClearingHouse)andinstantpaymentsarepickingupinNorthAmerica,non-cashtransactionsareexpectedtotallynearly7%CAGRduringtheforecastperiod(2021-2026).

?InLatinAmerica(especiallyincriticalmarketsBrazil,Peru,andColombia),thesuccessfuladoptionofinstantpaymentsystemsisconsideredthekeydriver.Forinstance,PIX,launchedinNovember2020bytheBrazilianCentralBank,istheinstantpaymentsystemusedbyalmost60%ofthepopulation.3

?InEurope,weexpectdigitalwalletstopropelnon-cashtransactionvolumegrowthduringtheforecastperiod.Digitalwalletswilllikelygaintractiononthebackofincreasingpaymentappadoption,easeofcross-bordertransactions,andtheimpendinglaunchoftheEuropeanDigitalIdentitywallet.4

Fromthemarketperspective,asignificantdriverforthebroadacceptanceofnewpaymentmethodsisthegrowingshareofe-commerceinglobaltrade.Inbusiness-to-consumer(B2C)globalretailsales,e-commerceisprojectedtogrow10.5timesfasterthanin-storesalesduring2019-2025.5Thischannelshifthaspromptedseveralfirmstostrategizeadirect-to-customer(D2C)businessmodel.Moreover,risingonlinecommercehascreatedaneedforstreamlinedcustomerjourneys,anoptimalpaymentmix(traditionalandnew),andvalue-addedservices(personalization).Thetrendisalsosignificantinthebusiness-to-business(B2B)space,furtherrampingupdemandforcross-borderandinstantpayments.

Keymarkettrends,changingcustomerbehaviors,andshiftingbusinessmodels

(D2C)havemadepaymentsacriticalbusiness

componenttoaddvalue,increaseuserappeal,

andstreamlinesupplychains.Today,payment

methodsensureoperationalefficiency.

However,toretaintheirpivotalposition,insightful

banksandPSPsrealizetheymustinnovatetheir

front-endB2Cpaymentcapabilitiesandevolve

theback-officepaymentvaluechain,which

includesadiversegroupofvendorsandsuppliers.

However,asB2Cpaymentcontinuestobecome

experiential,theB2Bpaymentsvaluechain

remainsunchangedandhasbecomevulnerable.

SMBsstruggleamiddisruptive

macroeconomicforces

COVID-19’safter-effectsstuntedeconomic

progressworldwideasgeopoliticalcrisisworsened

Notsurprisingly,anInternationalMonetary

Fundoutlookpredictsameager3.2%riseinglobal

growthin2022,downfrommorethan6.0%

in2021.6First,thepandemicdepletedseveral

nations’foreignexchangereserves.Then,

aslockdownsendedandspendingresumed,

recoveryledtosupplychainpressure,shortages,

andinflation.7

Supplychaindisruptionsalsocontinueto

impacttheeconomy,contributingtoinflation

andbusinessdebt.Andsmallandmedium

businesses(SMBs)8arebearingthebruntofthe

impactascomparedtolargerenterprises.SMBs

arethelifelineoftheglobaleconomy,accounting

formorethan90%ofbusinessesworldwide.On

average,theycontributehalfoftheglobalGDP

andaretheleadingworkforceemployer.91011

Despitebeingtheeconomicgrowthengine,

SMBsfaceliquidityandcashflowissues,predating

COVID-19.Byanestimate,almostUSD3trillion

waslockedinunclearedinvoicesasofJune2019

forUS-basedSMBs–asignificantamountthat

mightotherwisehavefundedcorebusiness

operations.Tofurthertheproblem,duringthe

firstquarter2021,payabledays(timefirmstake

topaysuppliers)rosefrom55to58days,despite

signsofpost-pandemicrecovery;consequently,

SMBswereforcedtodelayhiringandbusiness

expansionandhadtolimitinventorypurchases.12

Asaresult,smallandmediumbusinessescontinue

closingshopascapitalreservesdwindle.13

ThecumbersomeB2Bpaymentsvaluechain

–whichremainsmanual,error-prone,andreliant

uponlegacysystems–isacrucialdriverof

SMBs’inadequateaccesstocapital.Withinthe

B2Bpaymentsvaluechain,procure-to-payand

order-to-cashworkflowsremainopaqueand

intermediary-driven,withpaymentsandinformation

flowingviamail,fax,SMS,andpaperchecks.

Moreover,thefragmentedaccountsreceivable

andpayablelandscaperestrictsvalue-added

8

WorldPaymentsReport2022

servicesdevelopment,makingtheend-to-endprocessinefficientandcostly.

UnlikeB2Cpayments,atraditionalB2Bpaymentfollowsasynchronousfinalizationprocessinvolvingvalidationandagreementfrommultiplestakeholders.Unfortunately,thisleadstosignificantsettlementdelaysduetopoorinteroperabilitybetweeninvolvedpartiesandmanualtrackingandcommunication,whichincreasesoverheadcostsbyasmuchas5%pertransaction.Moreover,complexandopaqueprocessescreatevulnerabilities,makinghigh-valueB2Btransactionsanattractivetargetforcybercriminals.

Ongoingdisruptionfurtheraggravatestheseissues.Weengaged150SMBrepresentativesaspartofour2022WorldPaymentsReportprimaryresearch,andover70%agreedthatgeopoliticalandfinancialvolatility,technologydisruption,regulatorypressure,andincreasingITvulnerabilitiesaredrivingmarketupheaval.

NigelDobson,BankingServicesLeadatANZBank(Australia),said,“Pandemic,inflation,andgeopoliticalfactorshaveallhadanimpactonsupplychains,causingadministrativecoststoriseandshortagestooccur.Theyundoubtedlyhaveaninfluenceonthefrequencyandregularityofpaymentsbecauseofbusinessfactors.”

ThisturbulencehasdrivenchangesinSMBs’expectationsandpaymentsrequirements.Asaresult,theyseekpaymentservicesthatareconvenient,costefficient,anddigital(Figure2).

SMBsareimportanttothebankingindustry.TheycontributeupwardsofUSD800billionannuallytoglobalbankingrevenueandareontracktogrowalmost7%yearoveryear,reachingnearlyUSD1trillionby2027.14Despitethehighrevenuepotential,this

clientbaseoftenfindsitselfinfinancialserviceslimbo–stuckbetweenlargecorporatecustomersandlow-value/high-volumeretailcustomers.OntheB2C(andC2B)side,lowentrybarriershaveledtoawaveofinnovationandcompetitionfromFinTechsandBigTechsthathavesignificantlycontributedtodigitalizingthepaymentsvaluechain.

Conversely,B2Bpaymentsinnovationlags.OneestimatesaysmorethanUSD150trillionwasspentonB2Bpaymentsgloballyin2019,muchmorethanonB2C.15Beforethepandemic,about30%ofB2Bpaymentsweredigital,comparedwithnearly70%ofB2Cpayments.Formanybanksandpaymentserviceproviders,thehighcosttoserveandlowprofitabilityofSMBsdiminishestheirappeal.16EricTak,theHeadofthePaymentsCenteratING(Netherlands),agrees:“TheSMBmarketisunderservedbecauseofferingsareeitherretail/smallorhuge.Asaresult,packagingfortheSMBsegmentisachallenge,especiallywhentheyhavemulti-countryoperations.”Hecontinued,“Thissegmenthasahighcash-flowrequirementsincetheymustpre-financemostoftheiroperations.Additionally,priceshaveincreasedduetocurrentsupplychainchallenges,andtimelineshavebeenstretched,underscoringtheneedforbettercashmanagement.”

ButSMBshavewatchedthewaveofconsumerpaymentsinnovationmainlyfromthesidelinesbecauseFinTechinnovationdidnotimmediatelyimpactB2Bpayments.Now,however,PayTechsareslowlybutsurelypenetratingtheB2Bvaluechain.WithBigTechs(Apple,Alibaba,Google,Amazon)andFinTechs(PayPal,Stripe,Block,Revolut,andStarlingBank)enteringthemix,thehighlylucrativeSMBsegmentisbecomingacompetitivebattleground.Butwithfirst-moverpositionsatstake,canestablishedpaymentfirmsmeettheSMBchallengeintime?

Figure2.TopSMBexpectationsoftheirpaymentservicesproviders

61%

59%

57%

55%

51%

Real-time

processing/

settlement

automation

Source:CapgeminiResearchInstituteforFinancialServices,2022;WorldPaymentsReport2022SMBsurvey,N=150.

QuestiontoSMBparticipants:Whatareyourtopexpectationsfromyourbank?

Seamless

interaction

acrossvarious

payment

methodsand

messageformats

Protection

andprevention

ofcyber-crime

fraud

Easy,

cost-e?ective

cross-border

payments

Regulatoryand

compliance

support

Centralized

account

management

Process

optimization

and

61%

55%

WorldPaymentsReport2022

9

SMBsaredissatisfiedwiththeirincumbentbanks

OftheSMBleaderswesurveyed,61%saidtheyhadarelationshipwithtwotofivetraditionalbanks,andnearlyaquartersaidtheyworkedwithsixto10serviceproviders.Oftenunfavorabletermsforfinancialproducts–includingrentingfeesforPOSmachines,highinterestonworkingcapital,andoverdraftcoverage–forceSMBstomaintainmultiplebankingrelationships.Yet,despitetheirvariousaffiliations,SMBsstillfacechallengesacrossthepaymentvaluechain(Figure3).

Significantmiddle-marketenterprisechallengesexistaroundB2Bpayments,includingcybersecurity,provisionalliquidity,andoperationalefficiency.B2Bpaymentsprovidersfaceissuesrangingfromforextradingvolatilitytolowmarginsandhightransfercosts.Fraud,suchascompromisedemail,paymentdelays,poortransparency,andtheneedforautomation,arealsoproblematic.Forbanks,SMBdiversityposessignificantservicechallenges.BanksstruggletoaccommodatevaryingsizesofSMBfirms,disparatebusinessmaturitylevels,andindustriestowhichtheSMBmaybelong.Forinstance,paymentandcashmanagementconsiderationsforafoodandbeverageSMBmaydifferfromanautomobilepartsmanufacturer.ForbankstoserveSMBs,theyneedtocustomizetheirofferingstosuitvaryingneeds.

It’snowondermanySMBssaytheyarenotcompletelysatisfiedwiththeirtraditional

bankingpartners.Forexample,only11%ofSMBstoldustheywerehappywiththeirbankingrelationships,44%saidtheyweredissatisfied,and45%wereindifferent.Theresultisthat89%ofSMBssaytheyarereconsideringrelationshipswiththeirprimarybanksacrossvariousproductcategories.

New-ageplayerspreviouslyfocusedonB2CpaymentsnowtargettheB2Bpaymentsvaluechain,andSMBsareelated.Awin-winsituationhasdevelopedbecauseB2Bopensopportunitiesfornewpaymentsplayerstostimulateuniteconomics.

NewpaymentsplayersattractSMBswithvalue-addedservices

ThepandemicexpeditedB2Bpaymentsdigitalization.Asaresult,thesegment,notoriousforitspaper-basedandmanualprocesses,isexpectedtoexperiencedouble-digitgrowthfrom2021-2026innon-cashtransactionvolumes(Figure4).Additionally,FinTechsareinnovatingandsupportingsmallandmediumbusinesses,emphasizingdigitalizationofthesupplyandvaluechainstomodernizepaymentmethodsandboostsettlementtimeandprocess.

Digitalizationhasopenedthedoortonew-ageplayersactivelyintroducinginnovativevaluepropositionsacrosstheB2Bpaymentsvaluechain.TheglobalB2Bcommercialspendin2019wasUSD150trillion,with5%ofthetotalmarketservedbyPayTechs.TheremainingUSD140trillionormoreranoverlegacydomesticand

89%

ofSMBssaytheyarereconsideringrelationshipswiththeirprimarybanksacrossvariousproductcategories

Figure3.FinancialexecutivesadmitthatSMBsfaceseveralunresolvedissues

Ine?cientinvoicereconciliation

Bank/KYCdocumentationandothercomplianceissues

Processing/settlementdelays Cross-borderpaymentslimitationsIne?ectivecreditandcollectionpractices

Legacyorsiloedpaymentprocesses

Incompatiblemessagingformatsandchannels

Elevatedcyberthreats/fraud

Poorintegrationwithnewpaymentschemes

Lackofdataanalyticscapabilities

Lackofautomation

Sources:CapgeminiResearchInstituteforFinancialServices,2022;WorldPaymentsReport2022Executivesurvey,N=125.

Note:Invoicereconciliationistheprocessofmatchingbankstatementstotheoutgoingandincominginvoices.

Questiontobankexecutives:WhatchallengesplaguetheB2Bpaymentssector?(Fig.3representsthoserespondentswhoratedachallenge≥5,where1=LeastChallengingand7=HighestChallenge)

TECHNOLOGYISSUES

65%

65%

65%

PROCESSISSUES

74%

74%

89%

79%

76%

77%

72%

63%

10

WorldPaymentsReport2022

cross-borderbankingrails.So,it’sonlynaturalthatmorenew-agepaymentsplayerswillseektocashinbyleveragingtechnologyexpertisetoenablefasterandricherintegratedpaymentflows.17

Asaresult,innovativeofferingsareup,withasignificantfocusonandexponentialgrowthinmaturecategories,suchasB2Bcross-borderpayments.

TheglobalB2Bcross-borderpaymentmarketwilllikelyreachUSD35trillionin2022.Yetitishighlyfragmentedwithlowtransparency,resultinginrisksforSMBs.Thetraditionalprocesscaninvolveatleastsixintermediaries–thepayerandpayee,theirrespectivebanks,andtwocorrespondentbanks–withhightransactioncostsandlowprocessvisibility.18

New-agepaymentfirmsaretargetingtheseintermediaryroles.Forinstance,BankingCircleandCurrencyCloudtargetcorrespondentserviceswithglobalvirtualpaymentandaccountnetworks.PayTechssuchasTransferMateaimforend-usercross-borderpaymentspropositions.Wise,across-borderpaymentsspecialist,offersglobalmulti-currencywalletstoSMBsthatsignificantlyreducetransfercostswithahigherdegreeofautomation.WisemovesaboutUSD18billionperyearofB2Bpayme