How payment platforms can leverage open banking to simplify the B2B payments experience

Over half of all B2B payments are still made by bank transfer or cheque. How can payment platforms harness open banking to deliver a seamless B2B payments experience?

Business payments are at a turning point

While most B2B processes such as procurement and inventory management have been digitised, many companies still rely on analogue, antiquated workflows to take payments. For instance, paper cheques remain the most favoured payment method for 80% of B2B payments.

Offline processes are deeply ingrained as the main B2B payments solution since they have existed for decades. Despite digital means being available, businesses have been slow to implement them. But with $120 trillion moving between companies globally each year, the space is undeniably ready for innovation.

Open banking stands at the fore of this disruption to standardise B2B payments and simplify the payments experience beyond paper cheques and wire transfers. For merchants and marketplaces, embedding direct account-to-account payments into the checkout journey through open banking, maximises conversion rates and helps take back control of cash flow.

What are open banking payments?

Open banking payments are made directly from one bank to another, removing any unnecessary steps in the process. The process is seamless, secure and simple - offering an efficient transaction experience for businesses and their customers. And with Strong Customer Authentication (SCA) required for each payment, the prevalent risk of fraud is significantly reduced, if not eliminated.

At the end of 2021, over 26.6 million open banking payments were made - an increase of more than 500% in 12 months. Since the global value of open banking payments is predicted to exceed $116 billion in 2026, it’s quickly becoming a prefered payment method among businesses.

Why B2B payments have fallen behind

The fragmented B2B payments landscape stands in stark contrast to its B2C counterparts, where real-time payments are already becoming the norm. Contactless cards; mobile payments; P2P payments - these are just a few innovative methods that B2C customers regularly use when making a purchase.

Full digital adoption remains to be seen in the B2B space with 52% of all B2B payments still completed via bank transfer and 25% by check. This is attributed to the complexity of business payments where each business offers varying payment expectations; some offer credit in the form of invoice terms, whereas others require payment upfront.

Unpaid invoices rose by 41% since the start of the pandemic, against the backdrop of a rising late payments crisis. This, alongside the reliance on traditional payment methods, can have a direct impact on cash flow, leaving many businesses at risk of financial instability.

And as the remnants of Covid still cast a large credit shadow over many, a solution is needed to make B2B payments more economical and reliable.

Enabling a new era of B2B payments

Where companies once had to leverage different payment systems to process receivables and payables, open banking provides the ability to streamline the entire process.

Sprinque is one fintech advocating the shift from paper invoices to digital transactions by leveraging open banking. With Sprinque, merchants can seamlessly settle invoices via a B2B payment experience built into the Sprinque Checkout directly within the marketplace ecosystem.

Merging B2B payments with the simplicity of a B2C payment journey - customers can pay directly from the marketplace via Sprinque’s embedded B2B checkout. Selecting one or more invoices to settle, customers can then pay via a single log-in to their online banking app. It couldn’t get more simple than that.

B2B payments in the digital-age

The digital economy is forcing an evolution; from the rise of digital wallets to the convenience of click and collect, the way businesses are paying for goods and services is changing at pace. Open banking stands at the fore of this evolution, offering a more efficient transaction experience through a simple, secure API.

At its core, open banking will enable more B2B businesses to take back control of their payments experience and redefine how money moves from business to business. And for the payment platforms powering them, open banking presents an opportunity to innovate their solutions and better serve those that need them most.


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