Cloud and software as a service (SaaS) adoption across the globe have witnessed tremendous growth over the last few years. Gartner’s latest cloud adoption forecast suggests that cloud end-user spending is expected to hit $600 billion in 2023. However, despite this level of growth, companies in the cloud and IT services market are still caught up with many challenges.
For companies seeking to sell cloud, enterprise resource planning (ERP), IT services or SaaS subscriptions, processing high-value B2B (business to business) transactions that offer flexible payment options has been challenging. There are also challenges with how companies in these lines of service can perform high-volume transactions quickly and affordably through an automated checkout process.
In its quest to address these challenges, EBANX, a Brazilian payments fintech company specializing in B2B software and cloud payment services for emerging markets, has launched a new high-value-ticket automated payments solution. This announcement was made at EBANX’s recently concluded annual Latin America Summit in Mexico. The company announced that the automated payment process targets more companies seeking to sell cloud, ERP and SaaS subscriptions across Latin America and other parts of the world.
From the announcement made by EBANX’s CEO and co-founder, João Del Valle, during the launch, this new solution is expected to automate checkout purchases from $10,000 and above and handle large volumes of tickets in one swoop. In addition, the solution is also geared toward ensuring that the rapidly growing SaaS market in South America is provided with a payment processing solution that will streamline payments between SaaS companies in Latin America and other locations across the globe.
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Factors that may have fueled the launch
Summarizing its reason for rolling out this product, Del Valle stated that “Latin America has a fast-growing SaaS market, pacing at 27% per year through 2026, … . Meanwhile, at least half of cloud B2B purchases in LatAm are paid manually through bank transfers … . The most common option has been using a SWIFT bank-wire transfer, which can take up to five business days with costly transfer fees. We speed up and automatize the transfers and provide full reconciliation.”
With this launch, EBANX High Tickets is hoping to assist cloud and SaaS vendors in South America and Africa.
Why the expansion from Latin America to Africa?
It may seem strange that EBANX focused on Africa instead of turning to Europe and North America for this launch. There are two possible reasons behind this move.
Firstly, the European cloud and SaaS market is rife with B2B payment solutions providers and could potentially provide stiff competition for EBANX if it decides to push for the European and North American markets.
For instance, in recent years, other companies like Stripe and Chargify have launched similar products to help B2B SaaS companies with payment solutions and automated checkout of heavy payments and ticketing.
Another possible reason could be that Africa is showing great signs of rapid digital transformation.
“Africa is now bursting with growth potential,” explained Del Valle. “Digital adoption and consumption of online goods and services have accelerated rapidly within its countries, and investment capital has been pouring into the region.
“Africa’s fast-growing digital economy is only in its early days, and it’s projected to grow up and to the right for the next few decades. Together with local players, EBANX will be a catalyst to realize the many benefits of a digital economy even faster.”
EBANX further reveals that cloud adoption is rapidly penetrating developing countries, even faster than initially imagined.
Where does this leave the SaaS and cloud market?
Currently, the SaaS and cloud market is showing no signs of decline across the globe. Data from Synergy Research Group reports that software vendors in the SaaS and cloud market generated over $23 billion in Q1 2019.
This growth is further corroborated by IDC’s 2022 report on the public cloud, SaaS and platform-as-a-service (PaaS) market, which projects that the public cloud market will reach $400 billion by 2025 with a CAGR of 28.8 percent. These statistics predict that more vendors in the SaaS ecosystem are expected to spring up, not just in the U.S., Europe and South America but also in Africa and Asia.