Top 5 Trends Shaping B2B Payments in 2025

The Payments Podcast by Bottomline

Episode Transcript

Owen McDonald: Welcome to The Payments Podcast. I'm your host, Bottomline Managing Editor, Owen McDonald. The new year of 2025 is upon us. It's an excellent time for finance leaders to take stock, reassess, and plan for the year ahead.

Finance teams of all sizes will continue striving to achieve more and better results with fewer resources in 2025. They will also be adapting to technology advancements, economic shifts, payment regulations, fraud threats, and new prevention measures. For expert insights on these challenges, we are delighted to welcome BNY, Head of B2B payments, Rhea Wagh, to share her insights on trends and innovations shaping business payments in 2025. Rhea Wagh, Head of B2B payments for BNY, welcome to The Payments Podcast.

Rhea Wagh: Thank you so much for having me. I'm excited to be here, Owen.

Owen McDonald: I'm curious, Rhea, about your outlook on B2B market conditions in 2025. We had a topsy-turvy 2024, contentious U.S. presidential election, stubborn inflation, other factors. What are your expectations for 2025, your sort of high-level overview of the B2B markets?

Rhea Wagh: Yeah. I'm actually really excited about 2025. I think it's going to be an exciting and dynamic time, specifically for B2B payments. So, we're seeing major trends across digital transformation, fraud risk, and a growing emphasis on real-time payments and interoperability. 

So, in 2024, we saw a significant shift from traditional payment methods like checks, wire transfers, to automated digital first platforms, and not just within large enterprises. Right? We're seeing small and midsize companies catch up very quickly. I think the demand for seamless, faster, and more secure transactions is at an all-time high, and businesses are really no longer satisfied with the status quo of commercial payments. They want solutions that align with the speed and efficiency of consumer payments. I think the bar has definitely been raised, which is great because I think that really sets the stage for major innovation across the industry.

Owen McDonald: Digging a bit deeper on that, Rhea, I'm curious about what you see as the top three trends that will affect B2B payments in 2025. We're going with the rule of threes. What are your top three, and why are they your top three?

Rhea Wagh: Yeah. That's a great question. It's hard to narrow it down to three. But if I had to pick, the top three factors, here's what I'd say. First, I think real-time payments are going to be a game changer.

Over the past few years, we've seen incredible progress in real-time payment systems. And I think by 2025, they will become the norm in many, many parts of the world. But what's really exciting is the move towards interoperability. So, we're getting closer to a world where real-time payments are not just fast domestically, but also seamless across borders, and that's huge for businesses trying to manage international supply chains or pay overseas partners quickly. And I don't even have to tell you how transformative this is for global banks and FIs.

Owen McDonald: Oh, yeah.

Rhea Wagh: I think second, AI and automation are going to reshape everything. We're talking smarter, faster payments that don't just process transactions, but actually help businesses make better decisions. I think AI can predict cash flow needs, optimize payment timings, or even flag potential fraud before it happens. It's kind of like having a tiny brilliant financial advisor and risk officer embedded in your payment systems. Lastly, I think regulations are going to continue to evolve and push the industry forward.

I think we're seeing a big focus on standardization, like the global shift to ISO 20022, which is all about making payment data richer and easier to share. And at the same time, I think regulators are really tightening the screws on fraud prevention and data protection. And then there's a sustainability angle, of course. Right? So, businesses are going to face increasing pressure to adopt more eco- friendly, ESG aligned payment practices.

So, in short, real-time, AI, and regulation. I think these three forces are going to drive some serious change in the B2B payment space in 2025, and the businesses that adapt quickly will be the ones that come out ahead.

Owen McDonald: How should companies be preparing for the challenges of 2025 while also setting up to seize new opportunities? It's kind of a tough balancing act, especially in B2B. What are your thoughts on that, Rhea?

Rhea Wagh: Yeah. I think that's a very important question. I think preparation is really the key to thriving in this evolving landscape. So, I'd recommend that the first thing you do is really embrace digitization now. So, if your payment processes are still manual or fragmented, you're really going to fall behind, and, frankly, you're leaving money on the table.

Businesses should really invest in digital payment platforms that offer both real time capabilities and working capital opportunities that integrate seamlessly with ERP and accounting systems. The idea there is really to streamline your workflows, so payments are faster, more transparent, and easier to reconcile. So, it doesn't just save time, but, ultimately, the goal is to improve your cash flow visibility so you can make, better decisions.

Owen McDonald: Right.

Rhea Wagh: Second, I think prioritize interoperability and partnerships. With global trade continuing to expand, businesses should really work with providers that offer solutions designed for cross-border efficiency. So, look for banking partners who understand the regulatory and technical complexities of global payments and can help you navigate them. I think this is especially important as real-time, cross-border payments become more common. And it also doesn't hurt to have 240 years of experience in banking. Shameless plug.

Owen McDonald: That's okay.

Rhea Wagh: But I think, third is to leverage AI and data driven insights. Right? Don't just use payments as a utility. Think of them as a strategic tool. AI powered platforms can really help businesses optimize payment timings, predict cash flow gaps, and then ultimately reduce fraud risk, which could really lead to uncovering patterns and opportunities to improve operations.

For example, AI can identify where you might benefit from early payment discounts or help you renegotiate, supplier terms.

Owen McDonald: Right.

Rhea Wagh: And then I think, lastly, keeping an eye on ESG and sustainability is going to be critical. I think this is becoming a bigger and bigger focus for regulators and customers, especially as the newer generation comes into the working market. I think businesses should really consider adopting payment solutions that align with clients' sustainability goals.

Owen McDonald: Yeah. That's going to do nothing but gain fans if that's aligned. So, I agree with you a 100% on that. 

This is my last question, but it's kind of a long one, I guess. If major expansion of generative AI business use cases captured most of the headlines and sucked all the air out of the room in 2024. What will be the business story of 2025, Rhea? And what, if anything, will command attention in 2025 the way GenAI did in '24?

Rhea Wagh: Yeah. I definitely agree with you. GenAI took the center stage in 2024, transforming how businesses operate and innovate. And, honestly, I think the impact is still unfolding, and I'm sure there's a lot more to come there. But if I had to pick the story of 2025, I would say it's about the evolution of hyperconnected ecosystems driving us towards autonomous finance.

I think businesses are increasingly building integrated network where payments, data, and processes work together seamlessly. And in 2025, I think the shift will really lay the foundation for financial systems that can operate and optimize themselves.

Owen McDonald: Can you dig into that a little more? Do you have any more to add to that?

Rhea Wagh: Yeah. So, let me just give you some background on what a hyperconnected ecosystem is. So, it's when businesses connect their financial, operational, and supply chain systems into one unified network. So, instead of having a separate tool for invoicing and payments and cash flow management and procurement, everything is interconnected.

And here's the kicker, in real time. So, this integration allows data to flow freely across the organization, creating opportunities for AI and automation to step in and take over those routine tasks. And that's where the autonomous finance part comes in. So, these connected systems aren't just executing processes or acting on instructions, they're actually making the decisions, optimizing the outcomes, and even predicting future needs.

So what does that look like in real life? Right? Imagine an ecosystem where a purchase order automatically generates an invoice, triggers the payment upon delivery, and then updates the company's cash flow projections all without human intervention. I think that's the kind of efficiency and challenge that I'm hoping to see in 2025.

Owen McDonald: Do you think we will see it, at least a piece of it?

Rhea Wagh: I think there are definitely challenges, that come along with this. I think integration is one. You know, many companies, banks especially, have legacy systems that aren't designed to connect. I think it takes a lot of time and money to build a kind of infrastructure that supports this level of connectivity.

Owen McDonald: Right.

Rhea Wagh: I think trust is another big one. For this to work, businesses need to trust these systems can make decisions that align with their goals, which ultimately will require transparency and clear governance. And then data security is an obvious concern. Right? The more connected your systems are, the more vulnerable you can be to cyber threats.

Owen McDonald: Rhea, you told us about challenges. Now talk about the opportunities of a hyper-connected ecosystem like you were describing.

Rhea Wagh: Yeah. I think the opportunity is huge. Hyperconnected ecosystems don't just save time or reduce costs. I think they create entirely new ways of operating. Businesses can manage cash flow in real time, make smarter financial decisions, and unlock working capital faster, but I think it's so much more than that.

By moving towards autonomous finance, businesses can focus their human resources on strategy and innovation and providing the best-in-class client service, rather than those monotonous routine tasks. It's really all about creating agility and resiliency. Right? Being able to adapt instantly to changes in the market or supply chain is going to be the best form of future proofing. Which is why I think the story of 2025 will be all about businesses moving beyond automation and into autonomy, using hyperconnected ecosystems to transform finance from a reactive function into a proactive strategic advantage.

Owen McDonald: Alright. You heard it here first, autonomy. We at The Payments Podcast have just fulfilled our first resolution of 2025, which is to offer early analysis of market conditions, rising trends, new opportunities, and ongoing challenges. Our thanks to a great guest, BNY's Rhea Wagh, for being with us today. 

To our awesome audience, thanks for listening. Hit subscribe. Catch us again on your favorite podcast platforms, including Apple and Spotify. Bye for now.

Owen McDonald: The Payments Podcast from Bottomline.