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Kriya Payments

Digital B2B payments: early adopters will dominate their market

Anil Stocker
March 14, 2024
min read
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Early tech adoption is make or break for company success. In digital payments, B2B businesses cannot afford to be complacent.

In English, it’s the early bird that catches the worm. In Italian, he who sleeps doesn’t catch fish. In German, it's the morning hour that has gold in its mouth. From Chinese to Portuguese, there’s a variety of ways to say the same universal truth: those who get there early have the most chance of success. 

The success of early tech adopters

When it comes to technology, the buzzword for getting in before the mainstream is ‘early adopter’. Although not the creator or very first users (‘innovators’ are the first 2.5% of users, ‘early adopters’ are the next 13.5%), these forward-looking businesses get on board early and have an instant competitive advantage, which they can leverage to boost revenue or grow market share. 

In 2007, Netflix was the first video rental company to move away from DVDs and embrace subscription streaming. Now, it has 250 million global subscribers. 

In 2006, Amazon took a chance on ‘cloud computing’, building its Amazon Web Services (AWS) infrastructure initially to support its ecommerce back-office. In 2022, it generated revenues of $80 billion

In 2005, three Swedish friends were dismissed from a Dragon’s Den style competition for their ‘Buy Now, Pay Later’ (BNPL) payments idea. They were told ‘it would never work…and if it would work, the banks would just do it themselves.’ Now, Klarna’s 150 million consumers currently make two million purchases per day. 

Digital B2B payments: power up or play catch-up?

Whether it’s Klarna and BPNL, Wise and FX fees, or Revolut and online banking, early adopters have radically altered the landscape of the B2C payments space over the past 15 years. Now, the same is happening in B2B payments. 

Thanks to larger transaction volumes, the $120 trillion B2B payments market is far larger than its B2C counterpart, but only 7% of the payment volume is currently transacted digitally. This presents a huge opportunity for early adopters to power up their own growth. 

For example, imagine you’re a manufacturing merchant. If you add a checkout with multiple payment options to your website, you’re no longer just selling to distributors, but to trade professionals directly. If you digitise the last mile of offline purchases (i.e. sending pay links after receiving an over-the-phone order), you’d process transactions quicker and reduce operating costs. If you offer digital trade credit to allow your customers to buy with favourable payment terms, you’d grow your eCommerce through higher conversions and larger average order sizes. 

By adopting digital B2B payment options early, you’d maximise revenue potential and beat the competition. 

But on the flip side, if you wait too long, a rival will eat your lunch (and you’ll still need to adopt the tech later anyway). Legacy UK banks currently face a 22% decline in market share to digital-only challengers. Traditional car manufactures are playing catch-up to Tesla on electric vehicles (Tesla dominates half the market). Nokia was so slow at reacting to the software vs hardware trend in mobile phones that it went from global mobile market share of almost 50% in the year the iPhone launched to selling its mobile phone business for just €5.5 billion in 2014. 

Apple didn’t just eat Nokia’s lunch, it ate the hardware-focused phone industry and everything inside it.

B2B payments digitisation: complacency is not an option

When it comes to B2B payments digitisation, it’s not a case of ‘when’ or ‘if’ - the shift is happening right now and established retailers need to keep up or have their lunch eaten. 

We’ve seen this first-hand with our customers. Online marketplaces are disrupting the traditional B2B wholesale and distribution markets. Just look at Nivoda. Launched in 2017, Nivoda has totally flipped the gemstone industry on its head by offering PayLater flexible payment terms, investing heavily in great logistics, embedding financial tools along the supply chain, and enabling better price matching between buyer and seller. Nivoda is now the world’s fastest-growing online diamond marketplace. 

Encouraged (or perhaps concerned) by the rapid growth of these startups, we’ve noticed a shift in interest from far more established retailers and enterprises. Big companies, like Halfords, are seeing that payments can be embedded into the last mile of their offline orders. Paylinks and QR codes can be shared in WhatsApps or emails, effectively turning any messaging tool into a digital checkout. Trade cards, once limited to retail store credit are becoming apps, offering a unified spending limit across on- and offline sales channels.

There’s a reason there are no worldwide expressions on the benefits of playing catch-up. So who do you want to be: the early adopter or the laggard?

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.
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