Totalling 13 per cent of all non-cash payments, corporate non-cash payments represented around 133 billion transactions in 2021; a figure that’s forecast to expand to 200 billion transactions by 2025.
These were the core findings of LexisNexis Risk Solutions and Capgemini Invent, who together have released the results of the ‘LexisNexis Risk Solutions Corporate Digital Payments‘ study.
The study specifically considers the climate for corporate account-to-account (A2A) payments and the priorities for payment executives to transform their payment function whilst also identifying the key trends that are reshaping the corporate A2A payment market for years to come.
The study covers the United States, Canada, Europe, the Middle East and Asia-Pacific regions.
Findings are mostly based on insights from a survey of 400 payment managers, focus interviews with payment executives of large and multinational corporations, and insights from knowledgeable subject matter experts from LexisNexis Risk Solutions and Capgemini Invent who provided views on the market.
What the study found
Digital acceleration continues to fuel the rapid adoption of digital corporate payments. Corporate non-cash payments represented around 133 billion transactions in 2021, totalling 13 per cent of all non-cash payments.
A2A payment solutions continue to be the preferred choice for corporate payments processing with more than half of both accounts payables and accounts receivables handled via A2A solutions globally and 40 per cent of corporate payments processed fully automatically. As such, annual corporate non-cash payments are predicted to reach the 200 billion transactions mark by 2025.
“Payment operations leaders are increasingly taking more strategic seats at their organisations. They are transitioning their departments from being cost centres to becoming key creators of customer value. They are achieving this by adopting payment automation technology,” said Andrew Burlison, head of payments, LexisNexis Risk Solutions.
“The increased level of automation is enabling payment managers to focus more on payment strategy and business development. Defining a payment strategy, improving business performance and optimising costs are priorities that come before payment execution. Leveraging third-party capabilities is key to accelerating the development of state-of-the-art payments operations and optimising solution investment.”
Post-pandemic growth
Corporate digital payments are showing significant growth in recent years, fueled by corporations going digital during the pandemic and the ongoing standardisation of international payments.
Growth rates in the corporate payment segment are equally distributed across regions except for North America, which has a lower forecasted growth rate of 6.7 per cent CAGR due to its significant share of paper and offline-based payment transactions, which takes time to transition into digital payment means.
The American delay
Europe is the most advanced region for A2A payments, which are already the standard way of exchanging value among corporations.
While Canada closely mirrors European digital maturity levels, the US is lagging, with a large share of checks and non-digital payments still in use, even though the pandemic has significantly accelerated the shift towards digital payment solutions. North America and Europe together account for two-thirds of worldwide corporate non-cash payments volume.
Asia has a very scattered landscape, with advanced payment markers (e.g., China, Singapore and Hong Kong), while cash and non-digital payments remain important in other countries in the region (e.g., Vietnam, Cambodia and Indonesia).
A2A payments are the norm in the Middle East where payment infrastructures are efficient.
The future priority
Nearly 60 per cent of corporations rate digital transformation as a key priority for 2022, extending the global trend accelerated by the pandemic.
Increasing the share of non-cash payments and developing new services are other corporate objectives with a focus on continuing to reduce payment costs, reducing labour costs and improving automation.
