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B2B’s $7 Billion Embedded Finance Opportunity
There’s a multitrillion-dollar opportunity that’s rewriting the B2B playbook, and it starts with two words: embedded finance.
The consumer payments buzzword is steadily making headway into the B2B space, and it is beginning to drive real change for buyers and suppliers across sectors by integrating payment processing and financing capabilities directly into non-financial applications or platforms.
From streamlining payments to giving small- to medium-sized businesses (SMBs) access to lending directly within their enterprise resource planning (ERP) systems, embedded finance is simplifying everything from procurement to cash flow, helping create seamless, intuitive payment experiences.
Ultimately, embedded finance for B2B promises firms fast, frictionless payments baked into the workflow, without the dreaded detour to a clunky, external portal.
As businesses seek more efficient ways to manage payments and working capital, embedded finance is emerging as a transformative force in B2B commerce.
Read also: Click, Pay, Done: How Embedded Payments Could Transform B2B
The B2B Opportunity for Embedded Finance Innovation
Businesses are tired of outdated payment cycles and unpredictable working capital. Embedded finance allows them to manage cash flow, secure financing and reconcile payments in real time — all within their day-to-day platforms.
Embedded finance brings essential financial services directly into business platforms, creating a streamlined and intuitive payment experience that fits naturally into daily operations. For B2B companies, this is more than an incremental improvement — embedded finance is reshaping how businesses manage payments, working capital and cash flow, adding agility and resilience to the financial process.
This transformation reflects a broader trend in B2B: the need for seamless, efficient and flexible financial solutions that can keep up with digital and global businesses. Embedded finance allows businesses to unify financial activities — such as invoicing, payment processing and financing — into the platforms they already use to manage inventory, sales and supply chains, which has ushered in a range of strategic advantages.
“We’re injecting payment capabilities into business software platforms — whether that’s accounts payable, accounts receivable, vertical SaaS, or [ERP] systems,” Daniel Artin, head of FinTech partnerships at Boost Payment Solutions, told PYMNTS this month.
“Research shows that the volume of embedded B2B payments today is around $2.5 trillion, and we expect that to grow upwards of $6.5 [trillion] to $7 trillion within the next two to three years,” Artin added.
See also: Embedded Finance Helps Business Buyers Move Commerce Online
Overcoming the Challenges of Traditional B2B Payments
Manual reconciliation is a pain point in B2B transactions. Tracking payments across systems often leads to errors, duplications and, inevitably, delays in clearing invoices. Embedded finance automates much of this reconciliation process by linking payments directly to invoices and other transaction data within the same platform. This automation reduces errors and accelerates reconciliation, ensuring that finance teams can close out their books with confidence and speed.
These longstanding inefficiencies are a large part of why the B2B sector is where the real value and innovation of embedded finance are set to flourish, WEX Chief Digital Officer Karen Stroup told PYMNTS this month.
“At the end of the day, … the payment or financial instrument is often a means to an end,” Stroup said, adding that “whenever there are friction points in business, that’s where you get drop off.”
This month alone, Mastercard announced it is rolling out new embedded payments technology for the freight, shipping and logistics sectors. PYMNTS discussed the rise of embedded payments earlier this year in an interview with Jennifer Marriner, executive vice president of global acceptance solutions at Mastercard.
“Embedding [payments and financial products] across the value chain and within all of the experiences that a customer is going through in that commerce environment is incredibly important,” she said.
With streamlined processes, enhanced working capital management and a reduction in manual tasks, embedded finance offers an alternative to traditional financial systems. As more businesses recognize these advantages, they are adopting embedded finance to remain competitive, efficient and agile.
“The way that corporations make payment decisions is almost entirely embedded in the procurement process,” Dean M. Leavitt, founder and CEO of Boost Payment Solutions, told PYMNTS in July.
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See More In: automation, B2B, B2B Payments, Boost Payment Solutions, cash flow management, commercial payments, Daniel Artin, Dean M. Leavitt, embedded finance, invoice payments, Jennifer Marriner, Karen Stroup, logistics, MasterCard, News, PYMNTS News, SMBs, WEX, working capital
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