The conventional ways of B2B transactions are being shattered.
Automation is the driving force behind how organizations get paid these days.
Paper checks have been completely replaced by electronic transfers in the
consumer arena; however, the payment options in the B2B space have always been
slower to evolve.
Disruptive
payment technology has made it easier for people to network and connects from
all over the world. Market, however, has become flooded with a lot many options
for those looking for a holistic B2B payment platform.
We have compiled
a detailed guide to guide you on everything happening around the B2B solution
process, ranging from popular types, solutions, and secure transactions.
The Most Popular Types of B2B Payments
B2B transactions
or payments are made between two companies and involve issuing, receiving, and
processing payments that help to greatly improve the positive cash flow. Here
is a list of the most popular types of B2B payments:
1. Credit Cards
Credit cards are
convenient and inexpensive ways to facilitate transactions. The cards incur
interest rates (like an annual percentage rate (APR)) when the resolving
balance is paid fast; it gives businesses access to extra funds.
Credit card
transactions are highly secure which helps avoid fraud. Transactions appear on
a single statement at the end of the billing cycle.
2. Automated Clearing House (ACH Payments)
ACH, which
stands for Automated Clearing House, is another form of B2B digital payments
that is faster and more efficient than hard-copy methods. This type of
transaction moves electronically from one entity to another using a routing
number and bank accounts. ACH payments work great for B2B recurring payments.
Many
organizations use ACH as it is cost-effective, and help marketers manage cash
flow and settle accounts. There is a daily cut-off time for ACH payments and
they are only used in America.
3. Wire Transfers
Wire transfers
are a digital form of payment that facilitates B2B transactions. For real-time
payments, companies often use wire transfers for eCommerce and other digital
transactions. For international payments, wire transfers are the way to go.
Companies looking for a quick transfer find wire payments to have the best
terms and timing. Some wire transfers also have a daily cut-off time. There are
two types of wire transfers: cash and digital. In a cash-based wire transfer,
funds are sent to a cash office for a recipient to collect. In digital wire
transfer, funds are sent electronically from one bank account to another.
4. Digital Payment Platforms
A popular form
of B2B digital payment option is using an online platform from popular fintech
brands such as:
·
PayPal
·
Venmo
·
Google Pay
·
Dwolla and
·
Skrill
These platforms
can be used to electronically transfer money from one account to another. While
some of these payment platforms like Venmo and Google Pay are available through
mobile apps other like Paypal are used through a PC and/or mobile device. One downside
of using these platforms is that the fee incurred can sometimes be a lot higher
than other forms of digital payments.
5. Paper Checks
There has been a
decline in the use of paper checks since the past decade; however, the
companies are still using these to pay other businesses. Convenience-seeking
customers are often more interested in speed over security. For others, speed
is of lesser concern when serving other vendors.
With the help of
checks, brands can better track cash flow and inventory because there's always
a definitive audit trail which isn't possible with other digital payments.
Paper checks offer benefits like:
1.
Security & fraud detection
2.
Traceable checks
3.
Easier budgeting, and
4.
The facility of delayed deposit
6. Cash
Cash, in some
cases, facilitates better B2B transactions than other types of payments.
Businesses paying cash never have to pay an annual fee such as a line of
credit.
The advantages
of using cash include keeping your transaction expenses at a minimum. In some
cases vendors only accept cash. Any other type may lead to late fees and
inconvenience.
On the downside,
paying with cash, all the time, produces a negative cash flow balance. Credit
cards and electronic payments might be delayed. Paying with direct cash
eliminates the amount from your cash flow balance immediately.
Top B2B Payment Solutions for Businesses in 2021
As automation is
driving B2B payments, conventional payment methods such as cash have become
outdated pretty soon. Several new trends have evolved in the B2B payments
space, including:
a) Mobility
The use of
mobile devices has become a predominant trend for B2B marketers. Companies have
started rolling out enhanced mobile capabilities and payment portals as demand
continues to rise. This, in turn, gives a business more flexibility with its
business operations.
b) Real-Time Processing
Another trend
gathering momentum is real-time payments. Companies use real-time payment
systems and infrastructures are being developed and planned in more countries.
Companies
require speed, ease, convenience, security, and swift processing of their
payments. This drives more innovation and disruption in the payments industry.
Peer-to-peer Payments
The biggest
trend in B2B payments seems to be the path of peer-to-peer payments. All this
starts with speed and reliability. After all, companies need to be paid on time
to keep running and conveying whatever solution they need to deliver as quickly
as possible.
Here is the list of the top B2B payment solutions for businesses:
1. PayPal
This arguably is
the most popular B2B payment platform and has been a player in the P2P
financial space since 2003. The Paypal ecosystem in addition to accepting
online payments also offers other services such as barcode scanning, inventory
tracking, and eCommerce.
The additional
features include online invoicing, credit card reader, express checkout, mobile
card reader, and "Bill me Later” financing.
Opening up a
simple PayPal account is absolutely free. However, an additional cost might be
involved depending on the methodology of changing and receiving the payments.
Business accounts start at $30/month.
The advantages
of using the platform include global acceptability with international
transactions, fully customized online checkouts, and P2P transactions that are
absolutely free of cost.
The downside of
the platform includes long holds being put on funds for a variety of reasons,
inaccessible customer service, and lack of integration.
2. Transferwise
This UK-based
company believes that money should have no borders. They specialize in global
payments at a mid-market rate with no unexpected fees. It's fast, secure, and
simple. The additional features include:
1.
Handling up of large transfer amounts
2.
Multi-currency account for spending,
accepting, and holding money, and
3.
Simple transfers from one account to
another
Creating an
account with Transferwise is absolutely free. A fee is however involved to add
funds and convert currency. The site has a calculator so that the marketers are
never guessing rates.
The site
facilitates international money transfers, is user-friendly and easy to
navigate, the transfers are fast and efficient and the platform is amongst the
most affordable ones for rates. On the downside searching for payees in this
system can sometimes be difficult.
3. Tipalti
This is amongst
the most trusted brands for B2B payments that one can find. The platform has
over 150,000 suppliers and MTLs in the required states.
The platform
automates the entire payment management process and eliminates up to 80% of the
accounts payable workload. They offer bi-directional integration competencies
(Netsuite, Quickbooks Online, etc.) to large ERPs with an automated file
import/export system.
The pricing
starts at $149 per month and this platform benefits both the supplier and payer.
With growth, businesses can adopt for more advanced capabilities of Tipalti.
The platform has
specifically designed the Supplier Manager Portal for national and
international compliance and facilitates easy and error-free payment management
in 196 countries.
Data can be
normalized across any payment as the brand offers strong automation
functionalities. Searching for the payees in the system can sometimes be
difficult.
4. Square
This platform
has been designed to easily and securely process transactions with long-term
contracts or extra fees. All forms of payments can be accepted such as tap,
swipe, dip, key-in, invoices, appointments, and online payments.
The open API of
the platform also allows businesses to build their own custom solutions. Some
interesting additional features include issuing and redeeming gift cards,
accepting split tender payments, managing online store orders, generating
custom reports, and connecting a Bluetooth scanner and cash drawer.
The standard
processing fee is 2.6% + 10 cents for swipe, chip, magstripe, and contactless.
Extensive reporting and in-depth analysis is a key competency of the platform.
The cost for an instant deposit is high compared to other systems and it’s
challenging to switch accounts between multiple locations.
5. Remitly
Remitly is an
international payment system that leverages mobile technology to transact
across the globe. They’ve sent over $15 billion in funds across the globe with
no hidden charges. The tool is fundamentally faster than most financial tools
with global functions.
The economy
package of Remitly is free. Safe and fast currency conversion is amongst the
upsides of the platform. Even the transfer rates are highly competitive and not
all countries allow cash pickup.
6. Payoneer
This platform
boasts a mass payout service, allowing companies to pay their employees with a
single click – regardless of their geographical locations. The software
promotes an accommodating and secure payment process, providing top-notch
services.
This brand is
the worldwide member service provider of Mastercard and facilitates
cross-border payment. The transaction fee is $2.99 for a local bank transfer
& $15 for a USD SWIFT transfer.
One of the
biggest strengths of the platform is that it can be used to receive funds
domestically as well as internationally. However, on the downside rates and
exchange fees are higher than the market average.
7. Skrill
This platform
serves your businesses efficiently and eliminates worries. The transactions
using this brand facilitate anti-fraud screening and provide mobile management
for transactions on the go. The brand provides several online tools to avoid
cart abandonment.
This payment
option is absolutely free as long as brands are active and consistently logged
in. The platform offers hassle-free online payments, offers more currencies
than PayPal. The platform is highly accessible in many different markets.
However, a minimum monthly fee is required to keep the account open and not all
international banks have a tie-up with the payment facilitator.
8. Neteller
This brand
allows users to shop securely and safely anywhere in the United States &
offers more than 100 different payment options. Businesses benefit as they can
make instant payments to thousands of sites around the world.
All the
customers need is an email address and a password to pay & the average cost
for processing is around 2.5% per transaction. Neteller is your ultimate
virtual wallet with top security; however, the third-part funding can have
hidden fees.
9. Paysera
This brand
facilitates the quick and easy transaction of international funds. It remains
an inexpensive option for money transfers in more than 180 different countries.
The platform facilitates easy transfers in minutes to more than 5,000 e-shops.
It is easy to manage business revenue with Paysera checkout; however, the card
is only used in European countries.