The cross-border B2B money transfer market is ripe for disruption, as new technologies and legislative changes redefine traditional banking practices across the globe, according to Juniper Research.
Cross-border B2B transactions will exceed $218 trillion by 2022, up from $150 trillion in 2018, the company predicts.
Disrupting traditional cross-border B2B transactions
B2B Money Transfer: Cross-border Market Opportunities 2018-2022 Research author Lauren Foye explained: ‘While traditional banks still facilitate the vast bulk of B2B cross-border transactions, new technologies, such as virtual accounts, eInvoicing, and blockchain technology will aid in driving businesses to solutions which provide savings in time, efficiencies, and transparency’.
The proportion of cross-border B2B transfer values facilitated by newer Fintech start-ups and disruptive technologies, will grow from 7.5% in 2017; equating to $10.4 trillion, to reach 13.3% or $29 trillion by 2022. This will occur as more businesses utilize these efficient and transparent methods in a notoriously cloudy industry.
Juniper cited activities by Visa and Mastercard as beacons in this space. In addition to offering its own Visa B2B Connect’ service which utilizes blockchain-based Chain Core, Visa has partnered with Fintech start-up ‘Billtrust’ to provide virtual cards for B2B transactions. Likewise, Mastercard is working with Optal, to offer virtual accounts to businesses.
Opportunity to lead innovation charge
Juniper believes that banks are well placed to benefit from the opportunity posed in B2B transfers. For instance, legislative changes such as PSD2 in Europe, serve as a perfect opportunity to partner with Fintechs to deliver innovative services to companies; lest institutions fall behind and see Fintechs ultimately out maneuver them.