How Business Pay B2B Payments
Payments are driving companies’ financial inclusion and B2B
e-commerce in
emerging markets
In a nutshell
Local, digital, and alternative payment methods are driving B2B e-commerce growth by facilitating faster money transfers and including more businesses in digital trade.
Instant payments lead the way: EBANX internal data reveals a strong preference for instant payments in B2B transactions, with Pix accounting for 51% of B2B sales in Brazil and account-based transfers being successfully used for B2B in other Latin American and African markets.
Corporate credit cards also have a niche for online B2B purchases: recurring and low-ticket transactions. Cards account for the majority of sales for SaaS, social media, and digital services in Brazil, with over 50% of the volume in the past two years.
The uptake: Alternative Payment Methods, particularly instant transfers, are revolutionizing B2B digital commerce by offering faster settlement times and broader accessibility, while the industry shifts towards holistic, digital-first solutions tailored to business needs.
Like consumers, companies in rising markets have embarked on a digital transformation journey over the past years. As more consumers access digital payments, more businesses accept and use them. In practice, payments have been enablers for businesses' digital and financial inclusion, especially in emerging markets.
Take Brazil, for instance. Since the introduction of Pix, the instant payment method used by 90% of adults in the country, there has been a stunning financial inclusion of businesses. The number of companies with active financial services has increased 3.4 times in a five-year period, from 2018 to 2023, with a steeper curve from the end of 2020, when Pix was launched.
A study by the Central Bank has made it clear that payments, particularly Pix, were the key drivers of this shift, with companies moving from a credit-based relationship with the financial system to a payment-based one.
12M businesses
are active users of financial services in Brazil, a number that has increased exponentially after Pix
According to Leandro Carmo, Brazil Regional Director at EBANX, Pix plays a key role in the financial inclusion of companies in the country, especially SMBs (Small and Medium Businesses), largely due to its impact on cash flow. "Pix payments are processed the next day, while credit card payments can take up to 30 days. This quicker payment cycle helps small businesses avoid cash flow problems and keep their finances in better shape."
It is no coincidence that Pix evolved from being a predominantly P2P (person-to-person) instrument to having almost 60% of its transaction value directed to a business, which includes informal companies and microentrepreneurs, according to a recent Central Bank study. Moreover, of all Pix volume, 45% is B2B (business-to-business).
60%
of all Pix volume in Brazil is directed to a business, and 45% is B2B
In Mexico, where instant payments are yet to take off, a recent study from the Ministry of Finance showed that 60% of companies pay online. "One of the most consistent findings in this survey has been the progress of digitization in all aspects of business management, which was reflected in the use of digital payment methods," reads the report.
Contrary to what happened in Brazil, though, cards had the edge in promoting digital payments in Mexico. Debit cards are the most used digital payment method by companies in the country, jumping from 8% penetration in 2014 to 19% in 2020. Credit cards come next, with 15% penetration.
It seems counterintuitive, as Mexico is one of the Latin American markets with the largest unbanked population and where cash still reigns. But digital banks and fintech companies have been flocking to the country for this untapped opportunity, with companies like Nubank, DiDi, and Mercado Pago fighting to gain market share.
In Colombia, another cash-based economy, cash is still the number one payment choice among businesses, just like in Mexico, but digital wallets are the second most used payment method by companies, per a recent national survey. Mobile phones are the main channel for firms to make digital payments, with 87% penetration.
As a result, more Colombian firms declared having accounts within a fintech company (67%), such as Nequi, Daviplata, or Rappi Pay, rather than with traditional banks (52%).
67%
More Colombian companies have accounts within a fintech company (67%) rather than with traditional banks (52%)
This is common ground among emerging markets: companies' financial inclusion has been led by digital-first players, who are challenging incumbent banks and other traditional financial institutions. In Brazil, these players led the adoption curve of digital payments among businesses, surpassing incumbent banks in the number of active users by the end of 2023.
This is also what happened in Egypt, where Fawry, a fintech company founded in 2008, leveraged its payment acceptance services to start including businesses in the financial sector. The company was born as a payment collection service, offering solutions for cash payments and POS machines. From there, Fawry evolved to merchant credit and banking services, among other financial products, representing 17% of the company's revenue.
The company's latest financial report stresses its “commitment to delivering cutting-edge technology and adaptable solutions, addressing the financial needs of SMEs in Egypt.”
“Trust is everything for consumers and micro-merchants who feel large banks don’t care about them [...] Fawry wants to be the bank that appeals to the masses,” reads a recent analysis by Stears, an Africa-based market intelligence agency.
By building trust through accessible and reliable payment systems, Fawry is not only helping to bridge the financial gap for underserved businesses in Egypt but also driving the growth of digital and B2B e-commerce in the region.
Companies in emerging markets are ready for e-commerce
With companies’ financial and digital inclusion, it is safe to say that businesses in emerging markets are ready for the next level of digitization: B2B e-commerce.
Currently, more companies worldwide buy online than sell online. This is especially true in Latin America, where digital payments for companies have lower costs, high uptake, and lower settlement times than the global average, according to the World Bank's Business Ready report.
It is no coincidence that a recent study by the IADB focused on the Southern Cone of Latin America (Brazil, Argentina, Chile, Uruguay, and Paraguay) shows that the usage of B2B marketplaces and contractor platforms such as Alibaba, Fiverr, Upwork, and eWorldTrade has doubled in the region since 2020, with 40% to 60% of firms declaring to have used them.
“Those in B2B sales who think it’s optional to invest more in e-commerce are mistaken. It’s become the leading sales channel in revenue generation, usage, effectiveness, and investment,” reads the most recent McKinsey B2B Pulse Survey. As per the report, which surveyed 4,000 firms in 13 countries (including Brazil, Chile, and India), online sales are now the leading revenue channel among B2B companies, dethroning in-person sales and being responsible for 34% of revenue.
34%
of sales from B2B companies are online, per McKinsey B2B Pulse Survey
Cross-border e-commerce is a particular area of interest for B2B buyers in emerging markets, as it allows them to diversify their supply chain. “Firms that use e-commerce intensively have also been particularly likely to diversify their import markets, [...] to diversify vendors and manage supply chain shocks,” reads the IADB study. According to the document, firms that have diversified their vendors outperformed those that didn't, “possibly signaling that the supplier diversification has translated into greater resilience.”
Payments –mostly alternative– are unlocking B2B e-commerce in emerging markets
In emerging markets, payments play a crucial role in driving the adoption of B2B e-commerce—just as they are key to advancing businesses’ financial and digital inclusion.
“Here, we are talking mostly about local, digital, and alternative payment methods, like Pix or account-based transfers. These are the payments that are unlocking B2B e-commerce,” says Leandro Carmo, Brazil Regional Director at EBANX.
“Local, digital, and alternative payment methods are unlocking B2B e-commerce in emerging markets.”
Leandro Carmo
Brazil Regional Director at EBANX
Ultimately, offering alternative payments for B2B transactions is about bringing more money to the table: APMs are usually more widespread than credit cards among the general public, which makes them the obvious choice for businesses wanting to buy online.
According to Carmo, APMs' fast settlement times and high penetration rates are the top reasons for their adoption in B2B transactions. Thanks to those characteristics, they are including more businesses in the digital trade, particularly SMBs.
According to internal data from EBANX, alternative payments offer much faster transactions than the average for legacy B2B payments: confirmation time can be as low as 30 minutes with Pix (in Brazil) and 4 hours with SPEI (in Mexico).
“Pix or other instant payment rails are really interesting for B2B payments because you don't have to wait for settlement in the banking rails,” says Andy McHale, Senior Director of Product and Market Strategy at Spreedly, an open payments platform. “In an instant payment rail, the transfer is only done if there's money there, and the receiver gets it right away.” It streamlines reconciliation and reduces manual intervention while improving cash flow for both parties.
In markets where instant payments are not yet widespread, account-based transfers are the go-to payment method for B2B purchases, especially for higher-ticket transactions.
An analysis based on internal data from EBANX corroborates the high preference for alternative and instant payments for B2B purchases. In Brazil, 51% of B2B sales were paid with Pix. In other markets in Latin America and Africa, account-based transfers, such as Debin in Argentina and Ozow in South Africa, have also been successfully used as B2B payment methods.
“It's always an A2A transfer because nothing else supports the transaction limits,” says Wiza Jalakasi, Director of Africa Market Expansion at EBANX. “In addition, they are cheaper in terms of transaction fees when compared to cards.”
There's a stark difference between B2B and P2B purchases. In Brazil, for instance, credit cards are the number one payment method for personal online purchases, with 65% of sales over the past two years, according to EBANX internal data. In Latin American countries, credit and debit cards dominate consumer preferences, each representing 35% of sales volume.
Payment methods that account for a significant share of B2B purchases, such as Boleto Bancário in Brazil or account-based transfers in Latin America, have much smaller shares of P2B purchases.
“Account-based transfers might not have the best user experience for an online transaction, but they are secure and enable high-value payments in a more efficient way for B2B operations,” says Juliana Etcheverry, Director of Country Growth – Latin America at EBANX.
McHale from Spreedly highlights the security aspect of these alternative payments. “For most of them, there is a built-in safety feature. Payments must be authenticated, and customers need to log in and provide credentials to even send a payment in the first place. It's not like someone can just steal your bank account number and initiate transactions.”
“For most alternative payments, there is a built-in safety feature. Payments must be authenticated, and customers need to log in and provide credentials to even send a payment in the first place.”
Andy McHale
Senior Director of Product and Market Strategy at Spreedly
This is what happens with Instant EFTs (Electronic Funds Transfers) in South Africa or account-based transfers in Latin America, for instance, where nearly every transaction requests a PIN or user login to be confirmed. For some other relevant B2B payments, such as Boleto Bancário in Brazil, payments are made through online banking or even in-person at ATMs or bank counters.
In other words, transactions with most alternative payment methods can be considered “chargeback-free” since they usually require a layer of authentication and personal authorization to be completed—which suits the flow of a B2B transaction well.
“In the end, building trust and ensuring security is essential for merchants to adopt digital payment solutions,” says Karim Elbaz, Director for MENA at EBANX. For him, as emerging digital payments become integral to daily business operations, similar to Pix in Brazil and digital wallets in Colombia, companies will develop increased trust, accelerating the digitization of B2B purchasing.
How alternative payments unlocked cross-border trade for small businesses in Latin America
Small and medium-sized businesses (SMBs) face several challenges when engaging in cross-border trade, and payments are one of them. Traditional payment solutions do not meet these companies' specific needs, requiring specialized teams to deal with high-value transactions, payment confirmation, and reconciliation. This leads to inefficiencies and the loss of business opportunities.
To overcome these challenges, a B2B company based in Asia has partnered with EBANX to integrate alternative payment methods—such as electronic transfers, account-based transfers, digital wallets, cash payments, and Pix— and local card payments. Their request was to simplify cross-border trade and expand their market reach, aligning with local preferences and requirements.
Over the past year, the company has reached more than 14,000 clients in Brazil, Chile, Colombia, Mexico, and Peru, with 4,000 of these clients (30%) buying from them for the first time.
Moreover, over 75% of transactions were processed using alternative payment methods, reflecting strong alignment with regional payment preferences.
