Modern businesses are becoming increasingly sophisticated thanks to hi-tech payment methods and the means of transaction. These days hardly any businesses make payments through paper checks. All kinds of electronic transfers are fast replacing both cash and paper checks for business transactions.
In spite of this, many business-to-business transactions are still clinging to old-styled payment methods. But since B2B companies are more exposed to modern payment methods than ever before, we should shed some light on the trending payment methods in the market.
Here are the leading B2B payment types that companies mostly use.
Credit cards offer a convenient, simple, and less expensive way to allow business transactions and facilitate payment when necessary. On top of that businesses can easily track all their credit card payments through electronic statements or paper statements.
If not tracked properly and timely, delayed credit card overdue payments can cause a significant rate of interest and in the B2B perspective, this can reduce profitability.
Automated Clearing House (ACH)
Automated Clearing House (ACH) is a digital payment method known for faster and easier ways to make transactions. Because of their simplicity and ease, they are particularly great for recurring business transactions.
There are many financial institutions that charge nil for such transactions and hence ACH is regarded as the most cost-efficient way to make payments instead of using paper checks. The only downside of ACH is that it is only available in the US as a transaction method validated by banks.
Similar to ACH, wire transfers represent another type of digital payment for B2B transactions. Wire transfers are mostly used for real-time transactions whether in the context of B2B e-commerce or regular business transactions.
Whenever a business requires making any international payment, wire transfers represent the best method. Unlike the ACH method, Wire Transfers have a faster turnaround time since the funds after landing in the account become immediately accessible. Quick transfer of payment is the key value proposition of this method.
PayPal, Google Pay, and other Digital Wallets
Fintech digital wallets have emerged as very popular online methods for facilitating the quick transfer of funds. There are several such options in the market such as PayPal, Google Pay, Apple Pay, Skrill, PayTM, PhonePay, Venmo, and many others.
Some of these payment platforms such as Google Pay, Apple Pay, PhonePay, and quite a few also work as mobile wallet apps while Paypal and others are only accessed through browser-based websites. The additional fees incurred by such transactions are the only downside of these wallets.
Netbanking or Mobile Banking Apps
Finally, there are net banking or banking websites to transfer money to the account of another business. The net banking solutions are now also accessible through mobile banking apps to make quick payments whether from the workplace or home or on the go.
Mobile banking apps these days offer quick transactions while ensuring glitch-free security through auto-log off from active sessions and strong authentication measures through one-time passwords (OTP).
Lastly, we have paper checks and cash transactions that are traditional and too common to deserve any further discussion.
What Are The Key Trends In B2B Transactions Now?
While the market continues to grow at extreme rates, specific trends are appearing that any business, big or small, should pay close attention to. This will help to gain a competitive edge in future transactions. Some of the more common movements in the B2B payments industry include:
Mobility or on-the-go transactions is the most trending aspect of modern payment methods. In many business niches, faster payment processing is a key requirement for smooth business operation.
Accepting orders and payments simultaneously or within a small time gap can really improve operational ease and make suppliers better covered against uncertainties. This is where mobile payment solutions play an important role.
Real-time Payment Processing
Another major trend in the B2B payment space that is continuously getting more traction is real-time payment. In complete contrast to same-day ACH or NEFT transfer, real-time payment solutions and corresponding infrastructures are now being developed in many parts of the world.
Since time is crucial for profitability in most enterprises, the ease, speed, ease, simplicity, security, and convenience offered by real-time payments are likely to be popular.
Peer-to-peer Payment Method
Thanks to the increasing digitization of transactions, B2B payments and transactions are increasingly embracing the peer-to-peer payment method. Peer-to-peer payment through cryptocurrencies like Bitcoin ensures optimum security while fully reliable and lightning-fast transactions.
Introducing Most Popular B2B Payment Solutions For Retailers In 2021
Just as the top listed trends and popular payment methods show, some B2B payment solutions stand out as most effective for retailers and businesses in 2021. Here we list a few B2B payment solutions.
It is regarded to be the leading B2B payment platform that facilitates online payment, e-commerce transactions, barcode scanning, inventor tracking, invoicing, credit card reader, belated bill financing, etc. It charges either for each transaction separately or $30/month for business accounts. The only downsides of PayPal are difficulty in accessing customer service, non-availability in all e-commerce stores, and occasional delays due to holding funds.
Transferwise is a specialized global payment solution with a moderate rate and zero hidden cost. It offers a speedier method, a secure payment gateway, and simple processing. Multi-currency fund transfer is a great benefit of this solution. Some downsides of this solution are the absence of options for bitcoin transactions and the lack of support for debit cards in all countries.
Square is a user-focused platform to facilitate easy and smooth transactions without involving longer contracts and any additional fees. The best thing about the solution is that it allows accepting all types of payment through gesture-based actions, keys, invoices, and online methods. The solution offers special card swipe hardware for free and doesn’t take any monthly subscription fees. The only downside is the comparatively higher transaction fee for instant deposits.
Skrill as already a trusted money transfer solution in the B2B space offers all regular payment and transaction options ranging from cash, credit to email transactions covering as many as 30 currencies globally or more. The solution offers robust anti-fraud screening protection, allows withdrawing cash from ATMs, mobile transactions on the go, etc. The only downside is that not all major global banks are available within the ambit of Skrill.
This robust online tool allows users to make transactions securely and safely all over the United States and get access to transferred funds through a multitude of options. It is accepted widely with huge security assurance to funds, multi-currency support, ATM withdrawal, and few other features. As for the downside, the solution is not available outside of the US as of now.
B2B payment and transaction trends are continuously evolving over the years. Retailers all over the globe are increasingly opting for more sophisticated and tech-savvy payment methods than ever before. In a few years from now, we can expect cash and paper checks to be extinct as payment methods in many parts of the world. The digitization of payment methods is nearly complete.