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B2B Cross-Border Payments: Is a Real-Time Revolution on the Way?

By: Ronald De Bos
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In today’s increasingly interconnected world, businesses rely heavily on cross-border transactions to drive growth. B2B cross-border payments, however, have long been plagued by slow speeds, high costs, and complex regulations.

To overcome these hurdles and transform the way they transact around the globe, more and more businesses are looking to real-time, consumer-like payment experiences. Are real-time payments set to revolutionize the B2B world? Find out in this guide to this crucial emerging trend.

B2B Cross-Border Payments: A Complex Landscape

B2B payments, traditionally conducted through wire transfers or payment networks like SWIFT, are often slow and expensive. When B2B payments are made across borders, things only get more complicated.

International B2B transactions can take days to settle, incurring significant wait times and delays in business operations. Hidden fees and currency conversion charges add to costs. According to a survey of global business leaders, about two-thirds of organizations said they pay up to $50 in cross-border fees and up to 3% in foreign exchange fees.[1]

Complexity and potential costs are compounded by regulatory and compliance requirements, as business must navigate different tax laws, reporting obligations, and financial controls across various jurisdictions. 7 in 10 respondents to the survey above said they experience delays of up to 10 days when sending or receiving cross-border B2B payments.[2] Along the way, a lack of transparency and visibility into the transaction process can lead to further errors, disputes, and delays, hindering business efficiency and cash flow optimization.

In spite of friction, cross-border B2B payments continue to grow. One study suggests that by the end of 2024, B2B cross-border payments will exceed $40 trillion, up 9% from 2022.[3]

As we cover in our guide to global B2B payments, one of the most important trends in the world of B2B payments is the drive for B2C-like payment experiences. Against this backdrop, emerging real-time payment capabilities have the potential to radically change the way businesses send and receive transactions around the globe.

Real-Time Payments: A Game Changer for B2B Transactions

Real-time payments offer a potentially transformative solution to the challenges of traditional B2B cross-border payments. Unlike traditional methods, real-time payments utilize advanced technologies to settle transactions instantly, providing businesses with immediate access to funds. This eliminates delays and accelerates cash flow, allowing businesses to seize opportunities and operate with greater flexibility.

Real-time payments also offer significant cost benefits. By eliminating intermediary fees and leveraging transparent pricing models, businesses can save on transaction costs and exchange rate markups. Additionally, improved cash flow management allows for better utilization of funds and reduces reliance on expensive financing options.

Enhanced Efficiency, Improved Relationships, and Increased Revenue

The benefits of real-time payments go beyond cost savings and speed. By removing friction from the cross-border B2B payment process, businesses can unlock a range of operational efficiencies. Suppliers receive payments faster, leading to improved relationships and increased loyalty. Businesses can also streamline their accounts payable process, saving time and resources.

What’s more, as they emerge as a viable option, real-time payments will offer a competitive advantage in today’s global marketplace. Faster settlements allow businesses to respond to opportunities quicker, improve customer service, and expand their reach into new markets. This can lead to increased revenue and market share for those businesses that are among the earliest to embrace real-time payment technology.

The Future of B2B Cross-Border Payments: Real-Time is the New Standard

The adoption of real-time payments for B2B cross-border transactions is accelerating rapidly. Initiatives like the FedNow Service in the US are paving the way for greater interconnectivity and broader adoption of real-time payment systems across borders.

Despite the progress, challenges remain. Regulatory fragmentation and differing standards across countries can hinder the seamless flow of real-time payments. Additionally, concerns about security and fraud prevention need to be addressed to ensure the continued trust and adoption of this technology.

Nevertheless, the ascendence of real-time B2B cross-border transactions appears to be a matter of when not if. Projections from the Deloitte Center for Financial Services estimate that US businesses may transition as much as 37% of regular ACH payments and checks to real-time payments by 2028.[4]

To get ahead, the time to shore up your international B2B payment infrastructure is now.

Digital River: Cross-Border B2B Payments Partner

Digital River understands the challenges and opportunities of B2B cross-border payments in today’s time of evolving business models and rising expectations. In addition to more than 25 years of B2B ecommerce experience, we offer a comprehensive suite of B2B solutions to help businesses overcome complexity, seize new opportunities, and thrive in the global marketplace.

Join the digital transformation of B2B cross-border payments and unlock the full potential of your business with the help of Digital River. Contact us today to learn more about how we can help you reach new international buyers and grow your global B2B business like never before.