A new study from Juniper Research has found that the volume of B2B payments facilitated by non-bank fintech will exceed 53 billion in 2022, from a COVID-related low of 38 billion in 2020; representing 42% growth.
These vendors will account for 12.6% of B2B payments by volume in 2022. Despite the slow recovery elsewhere in the economy due to the pandemic, non-bank B2B payments will exceed 2019 volumes in 2021, showing how the migration from offline to online, and the need for greater efficiency, is helping non-traditional vendors.
As businesses recover from the pandemic, they are fundamentally reassessing their operations to maximise efficiency. As such, banks and traditional money transfer operators face a reckoning, pressed by newer, more innovative players offering more cost-effective solutions.
Fintech players beating banks on innovation
The new research, B2B Payments: Domestic, Cross-border & Instant Payments 2020-2025, analyses 20 leading challenger B2B payment providers examining their B2B payment offerings and digital innovation.
The top 3 non-bank vendors identified by Juniper Research as Innovative Leaders were TransferWise, Veem and Currencycloud.
These leading vendors offer digital capabilities that are unmatched in terms of efficiency, cost and value; allowing them to rapidly gain market share and threaten established market structures.
Research author Nick Maynard notes: “Fintech vendors have risen to prominence by offering both greater efficiency and ease of use, calling into question the fundamental approach that banks take. Banks must turn to APIs for greater automation, as well as more competitive pricing, to retain some influence in this highly lucrative market.”
Automation key to boosting efficiency
The research found that automation will be crucial in fixing the challenges faced by businesses in their payment processes. This automation must be enabled using open APIs, which can radically simplify sharing data between different systems. However, this automation will require a collaborative ecosystem to emerge, whereby B2B payments vendors integrate their systems with ERP and accounting packages, otherwise payment processes will remain highly manual and time-consuming.