B2b payment solution
03 January 2023, 2:35 (CET)

PAYMENT-PREVIEW:

3 B2B payment solutions we’re looking at in 2023


The last few years have been big for payments. Even under the shadow of the Covid-19 pandemic every type of fintech vertical grew1 in the first half of 2020 except one. In fact, the early months of the pandemic saw a 72% rise2 in the use of fintech apps in Europe as a result of lockdown orders. Digital payments were among the biggest growers3 during the pandemic, and the trend hasn’t stopped there. Between Q1 of 2021 and Q4 of 2022, it’s projected that the global financial services market will have grown by over $2.5 trillion.4

However, 2022 has introduced a range of new problems for businesses and consumers alike: the energy crisis, inflation, interest rate hikes, and fallout from the rising cost of living have all had an impact on the payments industry. While the sector continues to grow, the year on year increase in growth is set to shrink.

And with new solutions and improved regulation on the way in 2023, there’s a lot to look forward to.


In this blog:

  • Three B2B payment solutions for 2023
  • Other trends to look out for in 2023

Three B2B payment solutions for 2023

As Though the challenges of 2022 have already had an impact on business payments, there’s a significant silver lining. One of the biggest hurdles to alternative payments adoption is the persistent reliance on outdated infrastructure and a resistance to digitisation. As has already been the case with the pandemic, the challenges we’re facing now are likely to drive innovation, push traditional institutions and companies to modernise, and create new opportunities for payment solutions in 2023. Here are some fast-growing solutions we’re looking at in the coming year.

QR codes

Covid-19 triggered a major change in how consumers see and use QR codes. As restaurants, bars, and a host of other businesses turned to this convenient, contactless solution to ensure people’s safety, pointing our phones at a small black-and-white square became second nature. As we move into 2023, there’s now an interesting opportunity for account-to-account payments providers to make the most of this shift in behaviour. With WeChat and Alipay already having enjoyed massive success in China, there’s potential for companies to use QR codes to accept Open Banking payments in Europe. Since QR codes can be displayed digitally, on tablets, or physically printed, this may prove to be a versatile solution for triggering A2A payments in the future, bridging the gap between the virtual and physical worlds for both B2C and B2B transactions.

Virtual credit cards

Virtual cards are temporary credit cards that can be used to trigger online transactions through tokenization technology—turning sensitive data into a unique identifier. Because they’re not linked directly to a main company bank account, but to a wallet, they don’t put information at risk, and they’re already increasingly popular among businesses. In fact, the global value of virtual card transactions is projected to reach $6.2 trillion in 2026, increasing 370% over the next 4 years, and the vast majority of that will be from business transactions.<sup>5</sup>That’s because virtual cards are cheaper than paper checks, help businesses control their spending, integrate well with accounts payable software, and offer improved security.

A2A payments

As of 2021, A2A payments account for 13% of all checkouts in Europe, and they’ve seen significant growth in the B2B sector as well. In fact, A2A payments are arguably even more advantageous for businesses than they are for consumers. </br> Here’s why:

  • Low transaction costs
    Because card networks and other providers charge percentage-based fees for transactions, businesses making and receiving regular payments can incur unnecessary additional costs. By paying directly from a bank account, these charges are a thing of the past.
  • Instant Settlements
    Businesses live and die by their available working capital. With A2A payments, the money paid from a bank account doesn’t need to travel through redundant intermediaries, meaning instantaneous transfers, and healthy cash flow.
  • Security
    Because A2A payments in Europe are governed by PSD2 legislation, they include a raft of measures to ensure safe, reliable translations. Easy access to data and strong authentication mean credit checks and other measures can be automated, and the risk of fraud is significantly lowered.

 

Other trends to look out for in 2023

With Europe set to draft PSD3 legislation in 2023, ushering in the next wave of A2A payments innovation, direct debits are set to be one of most important payments solutions for businesses in the coming year.

When looking at a potential solution, however, it’s crucial that companies know how to choose their provider. Here are some key questions to ask when updating your payments system for 2023:
What unique features does the provider bring to the table?
How easily does the payment processing software integrate with your business?
Do they offer a clear and transparent fee structure?
Are their solutions compliant across Europe and the UK?
How quickly can they provide Reconciliation and Chargeback status updates?
Can they provide a balance check?
Are they GDPR compliant?
Can they identify the account holder for reduced fraud?

Wrap up

While macroeconomic trends for 2023 are at best uncertain, and we’re likely to see a downturn in several territories in the next few quarters, this isn’t necessarily a bad thing for payments. Transactions will always need to happen, and as the new year brings new challenges, the need for effective alternative payment solutions will only grow larger, spurring on fresh growth and innovation in the sector. To find out more about alternative payments, A2A payments, and the best solutions for the coming year, get in touch today.

1 dealroom.com (2022, 29. June): European Insurtech 2022: insurtech is well alive, [online]
https://www.economist.com/leaders/2017/05/06/the-worlds-most-valuable-resource-is-no-longer-oil-but-data [22.11.2022]

2 altexsoft (2020, 27. September): Insurance Technologies: 13 Disruptive Ideas to Change Insurance Companies with Telematics, Blockchain, Machine Learning, and APIs, [online]
https://www.easysend.io/blog/6-pain-points-of-traditional-data-collection-in-insurance-and-how-to-solve-them [22.11.2022]

3 altexsoft (2020, 27. September): Insurance Technologies: 13 Disruptive Ideas to Change Insurance Companies with Telematics, Blockchain, Machine Learning, and APIs, [online]
https://www.easysend.io/blog/6-pain-points-of-traditional-data-collection-in-insurance-and-how-to-solve-them [22.11.2022]

4 altexsoft (2020, 27. September): Insurance Technologies: 13 Disruptive Ideas to Change Insurance Companies with Telematics, Blockchain, Machine Learning, and APIs, [online]
https://www.easysend.io/blog/6-pain-points-of-traditional-data-collection-in-insurance-and-how-to-solve-them [22.11.2022]

5 altexsoft (2020, 27. September): Insurance Technologies: 13 Disruptive Ideas to Change Insurance Companies with Telematics, Blockchain, Machine Learning, and APIs, [online]
https://www.easysend.io/blog/6-pain-points-of-traditional-data-collection-in-insurance-and-how-to-solve-them [22.11.2022]

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