By Will Marwick
In the ever-evolving landscape of B2B payments, 2024 promises to usher in a new era marked by transformative shifts. The advent of real-time payments is no longer a futuristic concept but a dynamic force reshaping the present landscape. As our society becomes increasingly digital, it’s important to offer enhanced security measures to ensure payments are legitimate, putting people’s minds at ease. Technological advancements and a digital-first approach are propelling this transition, offering benefits not only to consumers but also optimising B2B transactions. Take a look at what we think will be the hottest payment trends in 2024.
Real-time payments are no longer the future but the present
Real-time payments are transforming B2B transactions already, but this will become even more evident and commonplace in the year ahead. These payments provide speed, efficiency, and enhanced capabilities that traditional payment methods often lack. As we become an increasingly more digital society, this transition to real-time payments makes sense, and will also be fuelled by technology and a digital-first approach. The benefits are numerous – not just for the consumer, who will benefit from a streamlined payment process, but also for the business. Money will be settled faster, cash flow management will be improved, and there will be an increase in transparency for everyone involved. The adaptation of real-time payments will be crucial in terms of digital transformation and will go a long way to optimise B2B payments in the next year.
To showcase the appetite in the market for real-time payments, the UK is currently developing the New Payments Architecture (NPA), which will serve as the next generation of real-time payments and will replace the Faster Payments scheme. Migration to this will start in the next year.APP fraud and enhanced security measures
With APP fraud reimbursement requirements coming into effect in October to combat common scams that entice people to authorise payments to fraudsters, both the victim and the fraudster’s payment service providers must share the liability 50/50 and pay the victim back entirely. This means that payment service providers will have inherent liability, so it’s important that before October, they pay close attention to their KYC processes, look intently at and validate their inbound leads, monitor transactions across accounts, and do due diligence to see if the client opening an account has a real use case for it and legitimate means to fund it. Onboarding rules will need to be stricter; some banks may even opt to restrict or block payments for a period of time while they validate a user.
It comes as no surprise that there will be increased emphasis on security to ensure these payments are legitimate. B2B platforms will be looking to incorporate advanced security measures, such as machine learning for fraud detection. They may even opt to incorporate blockchain technologies to provide a transparent and secure network where all data can be viewed.
New laws to protect consumer data will also be coming into effect, with the UK introducing The Statutory Instrument (SI) at the beginning of 2024, changing data protection so that it derives from British law, rather than EU law (which UK data protection legislation was previously based on).
Consumer banking trends continue to influence B2B payments
Consumer banking trends will continue to influence and dominate B2B payments and it’s expected that they will have even more of a sway in these spaces. A testament to this is Buy Now, Pay Later (BNPL), which has taken the banking space by storm, with more than one third of Brits having used BNPL in the last year – an astonishing 19 million people. This is in part credited to the cost of living crisis, which has seen many opt to spread out their payments into manageable chunks rather than pay one lump sum. This number has tripled from 2021 and is predicted to cause a boom not just in the consumer space, but among B2B payment providers too. It is predicted that between 2022 and 2026, BNPL will grow to an astounding 34.8 billion. As a result of BNPL’s success, B2B spaces are now integrating such styles of paying for goods and services, such as trade finance, alongside their more traditional payment offerings.
As we approach this new era, one question remains: how will these factors shape the future of B2B transactions? Time will show us the detailed picture formed by technology, security, and changing consumer habits, which will pave the way for more efficient, transparent, and smooth transactions. Bring on 2024 and all of the advancements it has to offer!
