Cross-Border Payment Highlights

The global B2B transfer market is currently estimated at $39.3 Trillion and expected to reach $56 Trillion in 2030. This size and growth highlight the relevance of ensuring a suitable forum to foment sharing of market intelligence and exploring partnership opportunities, which is how the CrossTech Payments 2023 conference was born. On May 11 and 12th, I had the opportunity to Co-chair this inaugural conference in Miami, FL with Priscilla Doliveira Friedman and the CrossTech ’s team, who put up a great event with the challenge of bringing together for the first time the Cross-Border B2B Payments Market.?

Using data from FXC Intelligence ’s report published on April 27th, 2023, while the P2P sector continues to grow - and is expected to grow 80% in 7 years - the B2B sector, with an expected growth of 43% in the same period, overshadows, by its size, the P2P market.

Diving deeper into these estimates, as we did in the B2B Payments Workshop that I moderated with Erick Schneider , we analyzed how every sub-sector of the cross-border B2B is experiencing a dynamic and unprecedented change. While B2B Ecommerce is expected to grow 120% by 2030, Large Enterprise Payments will grow 15%, while SMBs, 10% , B2C 83% and C2B 82%. For Money Transfer Companies, Small Banks and Fintechs providing business payments, challenging large banks for these markets, and leveraging the expected growth, makes me believe that the Cross-Border Payment industry is ready for a profound transformation.

From this first Cross-Border B2B Payments conference, through the panels that I moderated, other panels, presentations, interviews, and roundtables, plus networking talks with the company executives present, I made a list of event highlights that I want to share.

1. Building the B2B Ecosystem: Partnerships are a key foundation in any cross-border payments integration, not only in the development of outbound markets, but certainly in developing inbound rails to the countries that need to be served, with fast, cost-efficient, and reliable payment options. As we discussed, for more B2B payment providers directly serving consumers, a vast ecosystem of operational and financial partnerships, payment aggregators, technology providers, compliance services suppliers, innovative solution developers -just to name a few- will be needed. The partnerships that were developed in the event were only the first steps in building the B2B ecosystem.
2. From P2P to B2B, lessons learned:?The development of any payment market has its challenges, and from them, lessons are learned. Some companies want to be ahead of the pack, some are watching from the sidelines what others do first. For me, it was interesting to hear the major challenges of P2P money transfer providers in adjusting their operations to offer business payments. P2P providers were able to integrate C2B payments when Bill Payment Companies began operating some years ago. Slower to take off were the B2C payment providers, but that channel is growing rapidly. B2B payments are quite more challenging. Each P2P company is bound to make the choice soon: Should I leverage my current rails to provide business payments?
3. B2B Compliance, the KYB challenge: As we hear feedback from the B2B Compliance Workshop that took place at the event, a key pain point to be addressed is the complexity of knowing the business client and the steps needed to collect all the necessary information and paperwork, but also how to make a reasonable risk analysis of the B2B transactions that are taking place. Third party solution providers are needed to expedite the management of compliance models that are safe and cost-effective, and Compliance Officers must train themselves in this new frontier to make sure growth is managed reliably.
4. Regulatory Challenges:?Even if Europe and the UK were clear in overhauling their money transfer regulation to include licenses for any type of cross-border payments, most countries are yet to develop B2B payment regulation, both outbound as well as inbound. I don’t see much appetite from regulators in dealing with the needed B2B cross-border regulations, since they don’t have the pressure from multilateral agencies – the humanitarian and development importance of remittances – or from the law enforcement agencies – money laundering and terrorism financing. I hope that we, as an industry, make a good effort to develop the B2B payments industry with safe and sound practices while informing regulators of the growth, and the payment modalities being developed as the market expands. I do hope regulations are developed in as many markets as possible, as they would make it easier for the development of the sector.
5. Bank Partnerships: Even if the issue of derisking in the money transfer industry won’t go away, bank partnerships in the B2B Cross-Border Payments arena are taking a different turn than in the P2P market. I do not mean these partnerships are coming about easier; it is the nature of the partnerships that are changing. And faster payment initiatives are important here. As smaller banks decide to compete with larger banks for business clients by partnering with fintechs, these partnerships will take a new meaning. The progress of bank partnerships will be a constant theme of future B2B events.?
6. Crypto and Blockchain: I personally see the great potential for Crypto solutions to play a major role in the B2B sector that they have been achieving in P2P, either directly to consumer and even more so, as money moving solutions for P2P direct to consumer service providers. Larger transactions and the importance of better exchange rates will probably attract crypto companies into providing B2B solutions directly to clients, as some are already doing. The possibility of partnering still exists and I am very interested to see how they develop in this sector.

B2B product launch announcement by UniTeller Financial Services at the conference, alongside with key players in the B2B Market such as Nium and TerraPay are a clear example of the importance of the growing B2B sector for the money transfer industry, as well as the excitement of participants and sponsors who joined the event and hopefully they have other highlights of this event to share. Next year's event will promise to be an excitig one as the B2B sector evolves.