What are B2B Payments? Methods and Tips

Did you know that the global business-to-business (B2B) payments market size is expected to reach $2.2 billion by 2030?¹ B2B payments have become increasingly in demand, thanks to the rise of remote work, international expansion, and a desire to optimize supply chain processes.

In this article, we'll give you a 360-degree view of B2B payment platforms, discuss major payment methods, and explore how Wise Business could help you send and receive payments in instantly, in batches at high volumes at low cost.

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Table of Contents
What is a B2B payment? Typical B2B payment methods Processing B2B payments: Steps to success Explaining B2B payment gateways B2B payment trends B2B payment companies B2B international payments with Wise Business

What is a B2B payment?

At its basis, B2B payments are transactions between two companies rather than between a company and an individual consumer. As we dive deeper, you'll find that the world of B2B payments is intricate and often presents unique challenges as compared to business-to-consumer (B2C) transactions.

Within B2B payments processing, the transactions often involve larger amounts of money, longer payment terms, and more complex deals. And as businesses engage with other organizations around the globe, they have to navigate through various currencies, payment regulations, and tax structures.

With all these complexities in mind, it’s easy to see why picking the right payment methods can feel like a juggling act. That’s why having an understanding of your options and carefully selecting the most suitable payment methods will help to make your financial operations smooth sailing.

How much can you send with Wise Business?

If your account address is in one of our licensed states, or in a country outside of the US (US territories excluded), you can send up to: 1,000,000 USD per transfer on personal and business accounts 50,000 USD per 24 hours, and up to 250,000 USD over a 60 day period using bank debit (ACH) on your personal account. On your business account, you can send up to 400,000 USD over a 60 day period. 2,000 USD per 24 hours and 8,000 USD per 7 days using debit or credit cards

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Why are B2B payments so important?

The main reason why B2B payments are gaining momentum is that businesses everywhere are becoming more and more interconnected. As economies become more interdependent, international trade is booming, and digital marketplaces are flourishing like never before – companies increasingly need to have efficient, secure, and reliable B2B payment solutions in place.³

But B2B payments services go beyond just being an easy way to move money around. Let's dig a little deeper into why B2B payments are so essential.

As companies trade across borders and collaborate with partners worldwide, they need easy ways to exchange funds or make payments—whether for services, products, or even settling invoices. B2B payment solutions bridge the gaps and break down geographic or currency barriers.

These services also help businesses streamline their payment processes and reduce transaction costs. Many B2B payment providers offer features like centralized payment gateways and automated invoicing, which not only lower costs but also simplify the entire payment process, improving admin efficiency, and reducing human error.

And, of course, there’s also the security they provide. With businesses dealing with increasingly larger transaction sizes and sensitive financial data, we need secure payment channels to avoid unauthorized access or fraud. B2B payment providers often use advanced technologies like encryption, multi-factor authentication, and monitoring systems to keep transactions safe and maintain customer trust.

Something that’s usually overlooked when it comes to B2B payment solutions is how they help to foster positive business relationships and improve collaboration. On-time and efficient payments help maintain strong, mutually beneficial relationships and show off your business’s professionalism, reliability, and commitment to long-term collaboration.

Typical B2B payment methods

Businesses have a diverse array of B2B payment systems at their disposal, each unique in its own right. We’re going to navigate the ins and outs of these payment practices so you can choose the best option for your business.

• ACH (Automated Clearing House) transfers: ACH is an electronic network for processing financial transactions in the United States. It's a popular choice for businesses because of its low fees and fast processing times. In 2022, the ACH Network processed a whopping 30 billion payments, making it a still widely trusted B2B payment solution.⁴
• Wire transfers: Wire transfers are a quick and secure way to move funds between bank accounts globally. While they provide real-time transfers, which makes them attractive for international B2B payments, the main downside is the relatively higher fees compared to other options like ACH.
• Credit and debit cards: Although more common in B2C payments, some businesses also use credit and debit cards for B2B transactions. These methods offer a simple, quick, and secure way to make and receive payments. However, they usually come with processing fees and might not be ideal for larger transactions or settling invoices.
• Traditional checks: Despite advances in B2B electronic payments, many businesses still use traditional checks, especially for smaller transactions or in specific industries. In 2019, checks were still used in 42% of B2B transactions.⁵ While checks can be convenient, they also come with downsides, such as longer processing times and the risk of fraud.
• Electronic invoicing (e-invoicing): E-invoicing is gaining popularity as a more efficient and eco-friendly alternative to paper invoices. It streamlines the invoicing process through automation, reducing errors and helping businesses manage payments more accurately.
• Mobile and digital payment platforms: Emerging technologies and fintech solutions are transforming the B2B payments landscape. Mobile wallets, digital currencies (like cryptocurrencies), and payment platforms such as PayPal, Square, and Wise Business are providing businesses with more secure, quicker, and cost-effective payment alternatives.

Processing B2B payments: Steps to success

Now that you're familiar with some of the common B2B payment solutions, let's discuss how to process those payments efficiently. Having a smooth B2B payment processor is essential to make sure that your business maintains good relationships with other companies while keeping your finances healthy. Here are some key factors to consider:

Choosing a B2B payment platform: Because the B2B payment network is so large, there are plenty of solutions that could be a good fit for your business. Consider factors such as transaction fees, processing times, security features, the availability of multiple payment options, and your buyers’ preferences. Don't forget to factor in scalability, so you know the platform will still be a good choice as your business grows.

Creating and sending invoices: Invoicing provides a record of products or services and the corresponding payment terms. Craft clear and professional invoices, including important details like invoice number, date, payment terms, details of goods or services, taxes, and banking information for payments. According to PYMNTS, invoice reconciliation is considered a point of friction for 42% of buyers when it comes to paying their suppliers. 9% of them even believe it's the most significant issue they face in the payment process.⁶

Negotiating payment terms: Having clear payment terms with your clients or suppliers will help avoid confusion and potential disputes. Since B2B buyers have a stronger bargaining position, buying products in large quantities, they naturally expect discounted rates. They’re also not used to paying immediately upfront, unlike B2C transactions. This unique dynamic means you’ll need to carefully negotiate mutually beneficial terms for issues such as payment deadlines, upfront payments, installment plans, or early payment discounts.

Tracking payments and reminders: Staying on top of your accounts receivables and payables is a big part of cash flow management. To stay in control, use tools like B2B payment software to monitor your payments and set up notifications so that you don't miss any payment deadlines. In case of overdue invoices, send polite but firm reminders to your clients or suppliers – emphasizing the payment terms you agreed upon.

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Maintaining financial records: Detailed financial record-keeping is not only important for tax purposes but also for tracking expenses, evaluating business performance, and planning future budgets. Staying organized with digital solutions like cloud-based accounting software will save time, reduce errors, and get you easy access to vital financial information whenever you need it.

Establishing backup payment options: Sometimes, technical issues or disruptions can pop up out of the blue, delaying your payments or causing inconveniences for your clients. Having backup payment options – like an alternate payment platform or traditional banking methods – can make sure you have uninterrupted service and maintain your credibility.

Monitoring technological advancements and innovations: Stay informed about the latest technological advancements and trends in the world of B2B payments, such as real-time payments, blockchain technology, or the use of automation and artificial intelligence in financial systems. Keeping up with these innovations will allow you to integrate new solutions that could simplify your payment processes, enhance security, or provide cost-saving benefits.

Leveraging analytics for better decision-making: Analyzing B2B payment data can give you invaluable insights into your business's financial performance, customer preferences, and areas to improve. Lots of payment platforms now offer robust analytics features that offer a deeper understanding of your transactions, payment patterns, and general financial health.

Explaining B2B payment gateways

Another key aspect of B2B payments solutions is the payment gateway, which acts as the bridge between businesses and their financial networks. This digital tool is used to process online transactions securely and efficiently.

A B2B payment gateway is a service that authorizes and processes online transactions between businesses. It securely transfers sensitive financial information, like credit card or bank account details, from the payer to the payee. Payment gateways are designed with robust security measures in place, including encryption and tokenization, to protect your company and its clients against fraud and cyberattacks.

B2B payment trends

As the B2B landscape evolves, businesses need to stay ahead of the game by adapting to the latest trends. Let’s take a look at some emerging B2B payment trends you should keep an eye on.

The shift to digital payments

There's a big shift happening in the B2B world as businesses are moving away from traditional payment methods like checks towards digital options. This trend has been accelerated by the COVID-19 pandemic, with 82% of businesses changing how they send and receive payments.⁷ The convenience, speed, and security of digital options make this a trend that's unlikely to slow down any time soon.

Rise of real-time payments

In an increasingly fast-paced world, businesses demand quick, hassle-free transactions. With the growth of real-time payment solutions, businesses can now process high-value transactions both domestically and internationally with minimal delays. Time is money, so having instant access to funds lets companies become more agile and responsive.

Real-time payment systems also employ security measures to make sure transactions are not only fast but also safe. Especially as the global commerce landscape continues to grow, adopting real-time payment methods can give your business a competitive edge.

Adoption of mobile wallet applications

Mobile wallets have already made a significant impact in the B2C space, and now they're gradually making their presence felt in the world of B2B payment solutions too. The use of mobile wallets for B2B payments is becoming more widespread as businesses discover the convenience and flexibility that these applications offer. Mobile wallet usage is expected to grow at an annual rate of 22% until 2033.⁸

And it's not just about businesses adapting to mobile wallet usage – it's also about how they're leveraging these applications to improve their transaction processes. By enabling easy access to multiple payment options, optimizing payment tracking, and boasting features like digital receipts and instant payment notifications, mobile wallets are changing the way businesses conduct transactions with each other.

As an added bonus, the seamless user experience that companies enjoy in their B2C transactions with mobile wallets now carries over into B2B payment providers.

Cryptocurrencies and blockchain technology

Cryptocurrencies and blockchain technology are making their way into the B2B payments platform world, offering a new level of security and transparency for transactions. From a survey of 2,000 senior executives from US-based consumer companies, merchants are increasingly adopting digital currency payments with the goal of securing a competitive edge in their industry.⁹

They believe that the popularity of digital currencies will continue to grow, making their investment worthwhile and providing them with a strategic position in the market. The decentralized nature of blockchain technology means businesses won’t have to rely on middlemen as much and get to enjoy lower transaction costs and faster transaction speeds.

Focus on security and fraud prevention

With the world choosing digital, businesses can’t compromise on having robust security measures and fraud prevention strategies. Companies are increasingly turning to innovative technologies such as artificial intelligence, machine learning, and biometric authentication to keep their B2B transactions safe and sound.

Sustainable and eco-friendly payments

As environmental concerns rise in the corporate world, businesses are starting to explore and adopt eco-friendly payment methods. E-invoicing, paperless statements, and digital payments are just a few examples of how companies are reducing their carbon footprint in the payment process. This greener shift is a trend to watch, as an increasing number of organizations are prioritizing sustainability in their business practices. 63% of Americans want businesses to drive social and environmental change.¹⁰

B2B payment companies

The B2B payment space is a bustling marketplace – a place where many companies have made their home. These groundbreaking B2B payment companies are empowering businesses with solutions to navigate the complex sea of transactions.

1. Wise Business

Wise Business is a frontrunner in the B2B payments arena, focused on making international transactions easier. The platform offers an array of features, such as low-cost currency conversion, real-time exchange rates, and an account that can hold 40+ currencies, making it a go-to solution for businesses with a global footprint.

What makes Wise Business great:
Their transparent pricing Instant transfers Integrations with popular accounting software Free API for scheduled payments Batch payment tool (up to 1000 invoices in one click) Team alerts and permissions Auto-conversions (Convert and send at the right moment) High transfer limits

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2. PayPal

PayPal is a company that needs no introduction yet never fails to innovate in the world of B2B payments. With its vast global network and reputation for secure transactions, PayPal provides businesses of all sizes with a trusted platform to manage payments to suppliers and freelancers alike. Their extensive range of features lets businesses accept payments in various currencies and countries.

With versatile integrations with popular ecommerce and accounting platforms, combined with a flexible API for custom solutions, it’s a seamless fit for businesses looking to streamline their payment processes. And add that to their user-friendly interface, mobile apps, and fraud protections.

3. Payoneer

Payoneer also prioritizes cross-border payments, just like Wise. With Payoneer, businesses can access a range of features, such as receiving payments in multiple currencies, a secure global payment platform, and flexible API integration, making it a great choice for those looking to expand their international reach.

They’re committed to simplifying global transactions with tailored solutions for industries like ecommerce, freelancing, and digital marketing. However, Payoneer often adds a markup to their exchange rate margins, unlike Wise.

4. Stripe

Stripe is a powerful and developer-friendly B2B payment platform that is a favorite of online retailers, subscription services, and on-demand marketplaces alike. Stripe's suite of tools and APIs allows businesses to create tailored, flexible, and secure payment experiences. Their seamless integrations with e-commerce platforms and customizable checkout options have made it a favorite among businesses seeking complete control over their payment experiences.

B2B international payments with Wise Business

When it comes to B2B international payments, Wise Business truly stands out, offering businesses a low-cost solution that leaves traditional providers in the dust. With its high transfer limits and instant payments, Wise makes cross-border transactions feel like a breeze. These great offers have attracted over 300k businesses to use Wise Business every quarter.

But there's even more to the platform – their batch payments/API allows for easy scheduling of payments and mass B2B transfers at no extra cost.

And if that wasn't enough, Wise Business sweetens the deal with free auto-conversions, seamless integrations with top accounting software, and customizable controls, limits, and alerts to keep you in charge at all times.

Looking to save while managing your international business needs?

Send B2B payments >>

Trustpilot: 4.3/5 average rating - Excellent²
No minimum balance required and no monthly fees
Send instant, high-limit transfers

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Sources:

1. https://straitsresearch.com/report/b2b-payments-market
2. https://www.trustpilot.com/review/wise.com
3. https://marketbusinessnews.com/financial-glossary/global-interdependence-definition-meaning/
4. https://www.nacha.org/news/ach-network-moves-30-billion-payments-77-trillion-2022-led-growth-same-day-ach-and-b2b
5. https://www.jpmorgan.com/content/dam/jpm/treasury-services/documents/2019e-payments-report.pdf#page=6
6. https://www.pymnts.com/wp-content/uploads/2022/02/PYMNTS-The-New-User-Experience-February-2022.pdf
7. https://www.mastercard.com/news/press/2020/august/mastercard-study-shows-covid-19-a-catalyst-for-digital-b2b-payments-adoption/
8. https://www.globenewswire.com/news-release/2023/04/13/2646531/0/en/Demand-for-Mobile-Wallet-to-Accelerate-at-a-CAGR-of-22-to-Top-US-1-965-Billion-by-2033-Fact-MR-Report.html
9. https://www2.deloitte.com/us/en/pages/consulting/articles/digital-currency-payments-merchant-adoption-survey.html
10. https://conecomm.com/2017-csr-study/