The Future Of B2B and Business Travel
January 13, 2021
Commercial payments have seen unprecedented change with the rise of borderless payments. The digitalization of payment methods, demand for more efficient transactions and the unification of personal and professional payments have been a major player in the evolution of payments.
Global commercial payment transactions passed the threshold of $108trillion in 2022. This number is expected to rise to an incredible $135 trillion by 2025.
Some businesses will play a key role in the need to “modernise business travel payments for greater efficiency and control in the new era of corporate mobility”, as businesses are anticipating a surge in travel as we leave the pandemic behind.
Even though there’s been an undeniable surge in digitalization, we can’t forget the traditional payment methods – such as cash and check- according to The Fintech Times, they still account for 20% of total commercial payments. As many as 73% of small and medium enterprises (SMEs) still rely on cash to pay up their business expenses.
Research company Euromonitor International teamed up with Discover Global Network to interview 30 upper managers at large businesses in 16 different countries, as well as surveying 1,800 B2B respondents to shed some light on the commercial payments industry and what has shaped it in 2023, what to expect on the future and what range of challenges companies are facing.
One very stark challenge for large businesses is management, payment, tracking and reconciliation of supplier payments, which impacts several key parts of the organizations, such as accounts payable, procurement, and travel expense functions. All of these are things that decision-makers are actively trying to improve.
Decision-makers are actively seeking improved commercial payment solutions capable of delivering operational efficiencies, seamless integration, cost savings, and enhanced peace of mind.
Another change payments are seeing are the convergence of business and personal payment experiences.
Younger, digitally native business managers are bringing their consumer-oriented expectations into the B2B realm. As a result, businesses are increasingly seeking more efficient, streamlined, and intuitive digital payment management tools.
The role of VCNs
Virtual Card Numbers (VCNs) are a method of digital payment that allows a person to use a single time or multiple times, tied to one account, for a specific date and amount among other spend controls, and it has been invaluable when addressing business travel demands and B2B payments.
VCNs are regarded to be secure due to all the rules that can be assigned to them, and they have cemented their place in the market as well as improved in ease of management.
According to The Fintech Times, this transformation opens the door to significant advantages to businesses, as it helps with visibility into expenditures which leads to increased control over spending.
According to senior product manager at Discover Global Network, Dan McKenzie, VCNs are at the “forefront of consumer using commercial payments.”
With the re-emergence of business travel paired with the surge in payment advances over the past three years, we’re seeing a trend of consumerising commercial payments, or minimising the gap between how someone pays in their personal life vs. how they pay and expect to be paid in their work life; meeting business travellers where they already are in how they spend. We’re seeing this particularly within the travel space where VCN has seen steady growth in usage, volume, and use cases and is modernising quickly in partnership with fintechs and travel management companies that are optimising the VCN experience.
He added that VCNs have become more user-friendly, allowing both businesses and travelers greater control over business-related expenses, surpassing other payment experiences in regards to ease of use and convenience.
Business Travel
All said, the future holds promise for both large corporations and SMEs, as 49% of SMEs hope to invest in commercial payment solutions moving forward.
53% of large businesses plan to increase their use of digital payment methods, including VCNs, over the next two years to manage business travel.
Want to learn more? Check out The Fintech Times’s full write-up here.
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