The Latest Data on U.S. Payments Volume
According to the latest data from the Federal Reserve, the total volume of payments in the United States was approximately $1.6 quadrillion. However, this figure includes a wide range of transactions such as financial economy activities like company acquisitions and stock sales, in addition to consumer payments. Quantifying the specific total addressable market for business-to-business (B2B) payments—let alone shifts in payment instruments—is challenging.
This analysis was undertaken by Hugh Thomas, Lead Commercial & Enterprise Payments Analyst at Javelin Strategy & Research, through his report titled the Commercial Payments Factbook. His report delves into the commercial payments market, identifying growth rates for various products and detailing how financial institutions can impact business customers.
Defining the Addressable Market
Of the total payment volume reported by the Federal Reserve (with data from 2021), $1.4 quadrillion was attributed to wire transfers, which are typically not growth drivers in the payments sector. Thomas notes that wires often serve as a means to execute non-payment-focused transactions such as stock trades.
“Wires tend to be used at the end of events that aren’t necessarily payment-focused,” said Thomas. “They’re more about executing trades, like moving funds when stocks are traded.” He further explained that wire transfers do not typically drive treasury businesses and are generally for high-value, low-volume transactions.
Excluding wire transfers, the remaining payments value was over $200 trillion. After removing consumer payments from this total, about $175 trillion was identified as the addressable market for commercial payments.
The majority of these B2B payments were ACH credit transfers, where the initiator pushes funds to a payee. The second most prevalent type of payment was ACH debit, which allows payers to have an arrangement with payees for pulling funds from accounts, such as in bill pay or loan payments.
Checks still accounted for a significant portion of B2B transactions, though their usage has changed. Over the period from 2015 to 2024, check transaction sizes doubled while volumes halved, turning them into an exception solution used primarily when other payment methods are not feasible or too expensive.
Water Finding Its Level
The decline of paper checks has led to speculation that real-time payments through the FedNow or RTP network could become more prominent. However, the established financial infrastructure in the United States remains sufficient for commercial use cases. Same Day ACH transactions have seen some growth, but still account for only about 3% of total ACH.
While card-based transactions are common among U.S. consumers, their adoption is much lower in B2B, representing less than 2% of the total payment value. This discrepancy highlights a significant opportunity for card companies, particularly as more small businesses recognize that cards provide an effective and inexpensive way to pay suppliers.
Growth has also been observed in various commercial card types, including fleet cards, prepaid cards, and small-business credit cards. In addition, virtual card payments are gaining traction, with potential for accelerated growth due to emerging technologies like hashed card numbers and virtual card solutions.
The 5 Sectors
The study also examined B2B spending by sector, revealing that five key segments—wholesaling, manufacturing, retail, healthcare, and social assistance—dominate real-economy spending. While manufacturing contributes about a third of all spending, the healthcare sector is particularly significant due to its multiplier effect, where payments ripple through various industries.
A Resource at Your Fingertips
Understanding these metrics and segments is essential for financial institutions as they develop strategies to engage with business customers. For instance, identifying slower-paying sectors can help organizations improve cash management. By analyzing businesses with high days payable outstanding, providers can offer solutions like supply chain finance that expedite payments.
With ongoing supply chain disruptions, many organizations are reevaluating their strategies, presenting a valuable opportunity for financial service providers to engage in industry-specific discussions and recommend tailored solutions.