B2B Payments

B2B payments is the movement of money between businesses: invoices, supplier payments and the rails underneath them. In a September 2021 thread, Michael Spiro frames it as a $1T+ opportunity: roughly $120T+ in B2B payment volume today, rising to $200T by 2028 and about five times the size of B2C payments, with some 40% of payments still made by check and most invoices still processed manually.

The thread also lists what makes the category harder than consumer payments. B2C purchases run almost entirely on credit card or cash, while B2B buyers pay in a variety of ways. Large purchase amounts and high fees typically make credit cards a poor fit. Business buyers nonetheless expect a consumer-like experience. Spiro argues that digitizing the flow can turn payments “from a cost center to a revenue generator,” and that mid-market companies are left unserved because SMB tools lose value as revenue approaches $50m while enterprise tools cost too much. He also expects a wave of B2B marketplaces over the next decade, each needing payments built for it. See also Payments and Virtual Cards.

Companies filed under the topic: AvidXchange, Bill.com and Mastercard.

Where this appears

• B2B Payments Presents a $1T+… (tweet)

Materials — May 2020

• A May 2020 market deck (private diligence note in the wiki); PDF saved locally.