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Global B2B payments to reach US$124 trillion by 2028 - Industry roundup: 7 February

Global B2B payments to reach US$124 trillion by 2028

The value of B2B payments will grow 40% by 2028, up from US$89 trillion in 2024, due to the adoption of digital payments in developing markets, according to a new study from Juniper Research. Instant payments will revolutionise B2B payments by enabling cheaper and more secure cross-border trade, with instant payments reaching 42% of all cross-border payments by 2028, at US$16 trillion; up from just 17% in 2024, at US$5 trillion.

The research anticipates that adopting ISO 20022, a universal standard for instant payments’ financial messaging, will drive third-party providers to build additional value-added services that create business efficiencies. The extra remittance data that modern systems support can enable use cases such as automated accounting; drawing businesses to modern payment rails.

The research found that in many emerging markets, there were gaps in smaller businesses' access to banking. This was restricting digital access and innovation. To better serve smaller businesses, B2B payment providers must focus on offering B2B payment capabilities via popular local digital wallets and mobile money services. This approach can provide improved access to low‑cost digital payments, and can help B2B providers to create value-added services offering access to credit; a key pain point for small businesses.

“The key advantage of the messaging language used in ISO 20022 is that messages are easier for machines to read,” said Michael Greenwood, Research Analyst at Juniper Research and author of the report. “This makes it simpler to develop AI-based solutions around these payments; driving innovation.”


Commerzbank selects Surecomp to future-proof trade finance business

Surecomp has announced that Commerzbank has chosen to deploy its DOKA-NG solution for back-office trade finance processing across multiple entities. The decision follows a lengthy evaluation, with the bank selecting Surecomp for its strong market position, extensive global customer community and commitment to driving collaborative and open API-based digital trade finance transformation.

The Frankfurt-based bank considers trade finance a core service offering, processing high transaction volumes yearly. Integral to the bank’s future growth strategy, DOKA-NG - hosted in the bank’s private cloud environment - should strengthen and standardise the back-office processing of letters of credit, guarantees and other trade finance instruments to streamline their internal operations. This will improve control and visibility and enable faster customer approvals.

“A new, modern technological infrastructure is the foundation to securing our leading market position in trade finance and enables us to tailor our offerings even more to our customer’s needs,” said Jörg Motel, Global Head of Product Management Trade Finance at Commerzbank. “It fits into the long-term strategy of Commerzbank and shows our clear commitment to facilitating global trade finance for our German corporate clients.”


Lithuania tops Baltics for startup investments

Startup funding took a blow globally in 2023 — a 38% decline was observed last year compared to 2022. In the US, startups received almost 30% less funding in 2023 than in the year prior.  In Europe, Baltic startups received solid support from investors, as indicated in a Baltic Startup Funding Report by early-stage venture capital funds FIRSTPICK and Change Ventures. The semi-annual publication for H2 of 2023 contains data on 60% (370) of the pre-seed and seed rounds closed during the last 42 months.

As per the report, the Baltic states Lithuania, Latvia, and Estonia are measuring up to the UK and the Nordic countries regarding the number of funded startups per capita. The report shows that 23 Lithuanian startups raised €262m, 38 Estonian startups attracted €243.5m, while 19 Latvian startups captured €34.7m over the last six months of 2023. 

Even though Estonian startups were leaders among the Baltic states in all comparative categories, including pre-seed, seed, and series A rounds, the capital raised by Lithuanian startups points toward the country rapidly catching up in growth rounds. The country became the market’s leader in terms of growth capital and the number of growth rounds raised. Simultaneously, Lithuania and Latvia’s early-stage activities increased, suggesting more significant advances in subsequent funding stages.

Growth investments were on the rapid rise in the second half of last year. Nine growth rounds produced five times more capital in H2 than in the first six months of 2023 and amounted to €425.7m. Lithuania heavily contributed to the upward trend as three funding rounds in the country generated €200m, equaling 47% of Baltic growth funding.

Nord Security, Lithuania’s second unicorn and a cybersecurity startup, and PVcase, a cleantech startup that develops software for designing solar plants, attracted the largest investments in the country at the end of last year, raising €100m each. Seed funding also increased, reaching €69.2m.

However, pre-seed and series A funding took a hit in H2 of 2023. Although pre-seed startups raised €22.7m in the first half of last year, the capital raised in H2 was significantly lower, amounting to EUR 14.6M. Series A funding also did not demonstrate any positive changes, with only four A rounds amounting to €30.7m raised in total in the second half of last year.


Micro Connect and HSBC sign up to US$200m asset-backed loan facility 

Micro Connect, which connects global capital with micro and small businesses, has announced the signing of a syndicated asset-backed loan facility of up to US$200m, with initial credit support of US$50m from HSBC.

Following a US$25m asset-backed loan facility from HSBC in December 2022, the new loan facility is a validation of daily revenue obligation (DRO) as an underlying asset as Micro Connect continues to expand the DRO-based investment and financing market for micro and small businesses. Using asset-backed facilities should help Micro Connect develop an ecosystem with broad participation from a diverse set of professional investors, micro and small businesses, and market intermediaries.

“This new facility is crucial for expanding our business model in China and beyond, as well as helping us transform into a fully disinterested operator of MCEX,” said Charles Li, Founder and Chairman of Micro Connect. “We appreciate HSBC’s confidence in Micro Connect’s commitment to delivering innovative and accessible solutions to empower the underserved sectors of the economy.”


Airwallex to modernise global payment operations for McLaren Racing 

Airwallex has announced a multi-year partnership with the McLaren Formula 1 team, which will see it support McLaren’s global financial operations through its treasury management and cross-border pay-outs and settlement product suite.

Specifically, McLaren will use Airwallex to optimise its supply chain payments for all Grands Prix. McLaren’s existing payments infrastructure limits payment to suppliers, such as hotel and event space providers, to a singular currency account based in the UK, resulting in high foreign exchange (FX) charges, slow transfer time and additional SWIFT fees. 

Airwallex’s financial technology will provide multi-currency payment options for McLaren, which should give the company the ability to hold core currencies and exchange them quickly at any point while reducing the amount of SWIFT fees that may be payable by leveraging Airwallex's extensive global proprietary payment rail network.

As part of this partnership, Airwallex will also provide technology to support the launch and ongoing operation of McLaren’s digital partner merchandise platform - further enhancing their multi-currency collection capabilities and allowing them to offer a broad range of global and local payment options.


BNY Mellon and Microsoft partner on capital markets platform

BNY Mellon and Microsoft are collaborating to deliver a capital markets data and analytics platform. Using Microsoft Azure cloud and BNY Mellon’s financial data and analytics capabilities, the platform will provide the bank’s buy side and sell side clients with a data management solution.

The global alliance aims to help financial institutions navigate complex market dynamics with precision and agility while enhancing risk management and operational efficiency. As part of the expanded collaboration, the two companies will look to explore how artificial intelligence (AI) technologies can be incorporated for improved productivity and better-informed decision-making. BNY Mellon will also migrate its data and analytics workloads to Microsoft Azure.

“The technology and data ecosystems are becoming more complex, competitive and cost-intensive for our clients,” said Akash Shah, Chief Growth Officer, BNY Mellon. “Combining BNY Mellon's data infrastructure and analytics services with Microsoft's cloud solutions will provide our buy side and sell side clients with a leading data management solution designed to offer deeper insights and actionable data that can help improve their investment performance, distribution reach, and risk management.”


Fyle announces integration with American Express

Expense management platform Fyle has announced an integration with American Express. The tie-up will enable US business and corporate card members to issue on-demand virtual cards via the Fyle platform, with built-in controls and enhanced security. Fyle is participating in the AmEx Sync Commercial Partner Program to achieve this integration.

With the integration, customers can issue unlimited virtual cards linked to their existing physical cards using Fyle. With virtual cards, firms can establish specific controls such as spending limits and expiration dates. Suppliers can be paid using virtual cards, enabling corporate to take advantage of their American Express billing cycle to manage cash flow for their business until their card payment is due.

The integration also enables cardholders to receive real-time transaction data and notifications via text messages, automate receipt collection and make reconciliation faster with Fyle’s expense management platform.

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