Business Models in Cross-Border Payments

"B2B, C2C, B2C, C2B, what does each business model mean in cross-border payments?

The diagram below shows the market size, profit margin, and typical companies.

🔹 C2C (Customer pays Customer)

Typical scenarios include cross-border remittance etc. The profit margin is the highest (6%) among the 4 business models, and the volume is the lowest.

🔹 B2C (Business pays Customer)

Typical scenarios include salaries, welfare, and refunds. The profit margin is 1.5%, and the volume is 2.5X C2C.

🔹 C2B (Customer pays Business)

Typical scenarios include eCommerce and marketplace payments, PoS (Point-of-Sale), and billing. The profit margin is 3.5%, and the volume is higher than B2C.

🔹 B2B (Business pays Business)

Typical scenarios are inter-company trade and investments. The volume is much higher than the rest of the 3 business models, but the profit margin is 0.1%.

The innovations usually come out of customer-related payment scenarios (C2C, C2B), and typical business-related payment scenarios (B2C, B2B) are allegedly 10 years behind. There is a lot of manual work involved in KYC (Know-Your-Customer) and risk control. So a few VC-backed companies are committed to addressing the inefficiencies in B2B payments."

Author

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