5 Things Businesses Need To Know About B2B Payments

What Is B2B Market Research

1. What are B2B payments?

Payments that occur between two or more businesses are typically referred to as B2B, or business-to-business, payments. More specifically, B2B payments refer to the exchange of goods, services or information between companies, where one business acts as the buyer and the other as the supplier or service provider. For instance, a café owner who buys coffee beans from a wholesale supplier will pay the supplier by writing a check or making a bank transfer for the coffee beans received. In doing so, the café owner engages in a B2B transaction.

2. Commonly-used B2B payment methods

With various options available, understanding the most common B2B payment methods can help your business make informed decisions and optimize payment processes.

  • Checks – Checks have been a traditional and widely-accepted method of payment in B2B transactions for many years. Businesses are accustomed to issuing and receiving checks, and a physical paper trail becomes valuable for record-keeping, auditing purposes and financial reconciliation.
  • EFT (Canada) / ACH payments (US) – With a routing number and bank account, EFT (Electronic Funds Transfer) and ACH (Automated Clearing House) payments can be transferred from one entity to another in a matter of days. In 2022, the ACH Network moved 30 billion payments across the US, with a year-to-year increase of 11.8% in B2B payments.
  • Credit cards – Credit cards offer convenience and flexibility for everyone involved and provide businesses with the ability to make instant payments to suppliers and manage cash flow effectively.
  • Wire transfer – Recognized for their speed and global reach, wire transfers allow businesses to transfer funds electronically between different financial institutions around the world. While they often incur fees, wire transfers are secure and reliable, and ensure prompt payment–from under 24 hours to 3 business days–to suppliers and partners.

3. The latest B2B payment trends

Account-to-Account (A2A) payments, Real-Time Payments (RTP) and Embedded Payments are all popular B2B transaction methods, but Buy Now, Pay Later, also known as BNPL, is set to continue climbing the ladder after generating $100 billion in 2021. Although it originally gained popularity in the business-to-consumer (B2C) industry, BNPL has emerged as a flexible financing option in the B2B industry over the past few years, particularly when it comes to managing cash flow and procure goods and services.

4. Improved security

Through encrypted transactions, secure payment gateways and tokenization techniques, digital B2B payments offer advanced security measures to protect  financial information. By moving away from paper-based methods, businesses can also mitigate the risk of check fraud, theft or unauthorized access to sensitive data.

5. Increase sales with multiple payment options

Different customers have different preferences when it comes to payment options. Some may prefer using credit cards, while others may opt for PayPal, digital wallets or even traditional methods like checks. In a competitive market, providing a range of methods can give your business an edge, and customers who encounter limited payment options that don’t align with their preferences are likely to abandon the purchase altogether and move someplace else. So by providing multiple payment methods, your business reduces the barriers to purchase and increases the likelihood of completing a sale!

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5 Things Businesses Need To Know About B2B Payments
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