Cross-border business payments trends in 2024: Instant transfers, artificial intelligence, and mergers and acquisitions.
The B2B cross-border payments landscape is set for significant changes in 2024, as a wave of investments in startups and technological advancements reshape the industry.
According to recent market insights, the global B2B cross-border payments market, currently valued at $31.7 trillion, is projected to grow to approximately $47.8 trillion by 2032, with a 5.3% Compound Annual Growth Rate (CAGR). This expansion is driven by the rapid growth of cross-border e-commerce and the digitization of procurement and invoicing processes, particularly in emerging markets like China and India.
One of the key trends expected in 2024 is the increased adoption of real-time and local currency payments. In Asia-Pacific, regional cooperation on QR code standards and platforms like India’s UPI are driving instant peer-to-merchant transactions. Local currencies are increasingly used to reduce friction and costs, with providers layering loyalty programs in local currencies to boost wallet share.
Transparency and automation are also set to play a significant role in 2024. Corporates are leveraging data-rich ISO 20022 messaging standards to automate processes such as three-way matching, reducing dispute resolution times and improving cash management. Treasury managers are also exploring distributed ledger technology to enable payment-versus-payment (PvP) solutions, which can reduce settlement risks on long-term contracts.
Artificial Intelligence (AI) is likely to be integrated to optimize payment workflows, fraud detection, and compliance, especially in wallet-based super apps that combine payments with financial services like micro-lending and bill pay. Super apps dominate Asia-Pacific and Africa, offering wallets that extend beyond payments to micro-credit and government disbursements, enhancing financial inclusion.
Rebundling of services and acquisitions are also expected to continue as market players seek to expand their ecosystem and service offerings. Established companies in the cross-border payments space, such as Payoneer and OFX, have already seen a significant contribution to their revenues from B2B, indicating growing demand from businesses for better payment solutions.
Pricing pressure continues due to competition and the adoption of efficient payment rails. Stablecoins have been used to reduce costs in certain corridors, with fees dropping below 1% in some corridors like US-Mexico. However, stablecoins don’t necessarily reduce compliance costs, as Anti-Money Laundering (AML) and Know Your Customer (KYC) remain significant factors.
The integration of stablecoins and Central Bank Digital Currencies (CBDCs) is a hot topic, with potential to revolutionize cross-border payments, especially into countries with limited banking access. However, risks around compliance and criminal misuse exist, spurring regulatory developments such as the US Genius Act introducing a stablecoin framework.
CBDCs are being explored globally as a means to improve cross-border payment efficiency and transparency. Although details on their 2024 deployment are evolving, CBDCs are viewed as promising tools to reduce settlement times and enhance traceability, complementing existing payment infrastructures.
In 2024, businesses are demanding more transparent payment flows. To meet this demand, B2B cross-border payments companies are expected to provide platforms for fast, less costly, and more transparent payment flows between businesses. AI projects are also expected to boost fraud prevention and analytics in 2024 for B2B cross-border payments.
The B2B cross-border payments industry is less mature compared to consumer money transfers and lacks clear global leaders. However, consolidation and acquisitions are expected to continue in 2024, leading to a more consolidated industry with fewer but stronger players.
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In 2024, the growth of B2B cross-border payments will be driven not just by traditional finance and business, but also by the fintech sector and technology advancements, reshaping the industry landscape. Furthermore, the integration of AI in payment workflows, fraud detection, and compliance will be a key trend, enhancing transparency and efficiency in B2B cross-border payments.
