A recent report by Convera, a global B2B payments provider, predicts a substantial increase in the value of global services trade over the next five years. The Future of Trade and B2B Payments Report, supported by Oxford Economics, projects a 44% growth in the value of global services trade from 2023 to 2028, reaching $9.6 trillion in 2028.
This report delves into the evolving landscape of global trade, considering the impact of shifting geopolitical, economic, and environmental factors. Its findings have profound implications for the demand for B2B cross-border payment services as digitisation continues to fuel a significant surge in B2B international services trade, encompassing areas such as communications, marketing, financial services, education, tourism, and environmental services.
The report highlights that the transition to a low-carbon economy will reshape global trade patterns for goods. It anticipates a 30% growth in the value of global goods trade from 2023 to 2028, resulting in a total value of $27.9 trillion in 2028. Furthermore, the net zero transition will further bolster trade in capital and consumer goods, driven by the increased demand for renewable components and electric vehicles.
Despite the challenges posed by the pandemic and geopolitical tensions, global commerce has exhibited resilience, with total cross-border trade expanding by 24% between 2019 and 2022. Overall, the value of global trade is projected to increase by $10 trillion, or 33%, reaching a total of $39.8 trillion from 2023 to 2028.
While the global economy faces a period of sustained weakness in the short term (2023-2024), the long-term outlook for global trade appears brighter. Efforts to enhance supply chain resilience and align trade policies with objectives such as the low-carbon transition will result in shifts in traditional trade patterns.
Convera CEO Patrick Gauthier stated, “Despite recent shocks to global trade, interconnectedness remains crucial for businesses aiming to improve cost efficiencies and explore revenue opportunities. With the acceleration of digitisation and automation, we anticipate that B2B trade will be a significant driver of growth in the years ahead.”
Gauthier further emphasised the transformative impact of the low-carbon transition on global goods trade, opening up new business prospects and challenges. The report serves as a resource for business executives, providing forward-looking market insights to inform decisions that will reshape their international operations in the next three to five years.
The report also underscores the pivotal role of trade policies in shaping geopolitical relationships and achieving environmental goals, which, in turn, will influence future trade flow patterns. Rivalries between Western governments and China in technology and knowledge flows are expected to create opportunities for emerging economies in Asia, particularly those with low costs and advanced manufacturing capabilities like South Korea.
While trade policies aligned with environmental and climate objectives, such as the EU’s Carbon Border Adjustment Mechanism (CBAM), offer sustainable growth opportunities, they may disrupt traditional trade patterns. Consequently, regionalised trade is anticipated to increase, reflecting evolving dynamics in the global marketplace.
The report sheds light on how these evolving trade patterns impact the demand for seamless B2B payments. Convera has witnessed a significant increase in demand for its automated payment solutions over the past five years. The share of payment volumes processed through automated payment methods, such as APIs, has risen globally from 36.8% in 2019 to 49.1% by 2023.
There is also a growing demand from customers to mitigate currency risk and future-proof their payments and profit margins in response to consistent interest rate hikes. Convera’s hedging transaction volumes have surged by 3.5% between 2019 and 2022, with accelerated growth observed between 2021 and 2022 (+29.4% YoY).
Despite progress, business interoperability remains a key challenge, as companies navigate multiple banks, payment systems, countries, and currencies. These complexities introduce unexpected risks that impact customers, compliance operations, and regulators.