‘2023 is the year B2B ecommerce payments become real’: 3 questions with Bar Geron, CEO of Balance
- As both the B2B payments and ecommerce markets continue to grow, what’s in store for their offspring, B2B ecommerce payments?
- In this Q&A, Balance co-founder and CEO Bar Geron dives into the rise of B2B ecommerce in 2023.
B2B payments are expected to grow dramatically during the coming years, predicted to reach $1.56 trillion by 2028, according to a report by Zion Market Research. For perspective, the B2B payments market was worth $942.67 billion in 2021. Ecommerce has also been seeing its fair share of growth, with the market size expected to go from $2.84 trillion in 2022 to $3.18 trillion by the end of 2023, according to the Business Research Company’s global market report.
It may be only natural, then, that B2B ecommerce payment solutions are also getting more attention lately, with Shopify, Magneto, and Bigcommerce all putting more focus in this area.
Tearsheet sat down with co-founder and CEO of Balance, Bar Geron, to talk about what 2023 has in store for B2B ecommerce payments.
If every year were a chapter of the B2B ecommerce saga, what title would you give 2023?
I would call 2023 ‘the year B2B ecommerce payments become real’. I see 2023 as the year of realization for all of the progress that’s been made in the last five years to transform B2B trade to something that we know from the B2C space, which is seamless and scalable, and which may sound maybe a bit boring or trivial, but has the potential to change everything. B2B ecommerce isn’t only a tool to enhance your experience in making payments: it's your ability to find new vendors to work with and to reduce your costs. An efficient market provides the ability for buyers to find vendors, and for vendors to compete with each other and find new buyers.
What would you say is the biggest challenge for B2B commerce going into 2023?
It’s interesting: the way I see it, the biggest challenge in terms of risk is credit risk, because, at the end, retailers can’t purchase their supply with credit cards – they will max out. It's just unscalable. So what they need is a way to pay their distributors – and often that means requesting to pay with wires.
So let’s say a buyer comes to Ben & Jerry's, and says, hey, I want to make a purchase on this website, but I need to pay with 30-day payment terms, and I need to pay with a wire. Ben & Jerry's would most likely be sitting there thinking, I don't know you, and you want me to give you the goods before you pay me and wait for the payment to arrive with a wire? Who would look to do that?
So creating that trust between both parties is something that they are very concerned about.
The biggest challenge of ecommerce and B2B, then, would be to facilitate trust, because it would be impossible to enable self-serve payment expenses without trusting that the buyer will be delivering on the goods that were provided.
What B2B ecommerce trends are you expecting to see this year?
I think B2B ecommerce in general will be even more multifaceted. B2B ecommerce cannot be looked at from only the commerce side – you have to go behind the scenes. This will be essential for merchants: If they truly want to see their commerce channels succeed, they need to improve everything – from convenience, to accessibility, to efficiency. Merchants are realizing that to move an organization online, you need to have a holistic approach: you can't think of this shift as a project for one department in the organization.
The other thing that makes me excited about 2023 is the greater focus that ecommerce has today on B2B. You have seen the recent announcements from Shopify, Bigcommerce, and Magento – they all decided to double down on B2B.
It’s a similar story to what we know on the AWS side. The biggest revolution that Amazon brought to the world is actually not its online store, but rather AWS. AWS provides the ability for everyone to use storage of software to build any software without holding servers in their garage. When you were a kid, and let's say your parents wanted to build a software for you to use, they needed to have servers in their house to store the information. To write code on AWS is the ability to do it in the cloud, without having anything in your house and using someone else's servers. And obviously, that was a huge acceleration of building software companies.
This is what ecommerce is going through right now: because these platforms are doubling down on B2B, it’s never been easier to use them and enable third-party integrations.