The international B2B payments landscape is huge. Already estimated to be 10 times larger in transaction volume than the B2C market, there is clearly demand, but innovation in this niche has been slow.
Our research shows that banks continue to dominate the market; despite them offering a service that is both slow and expensive. There is clearly a need for greater collaboration between central banks across the world to make real-time international payments a reality, but progress in delivering a global B2B real-time payments solution through a corresponding banking network is still many years off.
The challenges facing global real-time payments
According to the McKinsey & Company report ‘Global Payments 2015: A Healthy Industry Confronts Disruption’:
“Cross-border payments inefficiencies are opening doors for new players. The entry of nonbank players and new infrastructure demands is not limited to domestic payments: they will also affect cross-border payments. To date, banks have done little to improve the back-end systems and processes involved in cross-border payments.
As a result, cross-border payments remain expensive for customers, who also face numerous pain points (e.g., lack of transparency and tracking, slow processing times).
However, as nonbank players increasingly encroach on the traditional cross-border turf of banks— moving from consumer-to-consumer (C2C) to business-to-business (B2B) cross-border payments—they will force many banks to rethink their longstanding approaches to cross-border payments.”
This demonstrates that the global payments landscape is wide open for disruption – and banks are fully aware that disruptors are able to move more quickly to meet demand. In addition to this, creating such schemes and infrastructure is going to be costly, and once completed banks may still charge high fees to ensure that offering real-time global payments remains profitable.
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Saxo Payments has explored the current landscape and the challenges faced by banks and businesses alike. To view the infographic, please complete the form below.
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