B2B eCommerce is slowly becoming the best source to purchase products in bulk. It enables companies with wholesale requirements to find reliable suppliers from different corners of the world quickly. But many B2B companies still need help choosing the best payment methods they should use in their eCommerce stores, and this guide will help to alleviate all such confusion.
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What is a B2B Payment?
A B2B payment is a transaction that typically happens between two business entities. The B2B in B2B transactions is short for business-to-business. It should give you a general idea of how a B2B transaction differs from a regular retail business transaction. B2B transactions involve exchanging goods and services for money like everyday online transactions.
There are only two significant differences between B2B and B2C (business-to-customer) transactions. In a B2B transaction, the buyer is a business entity instead of an individual customer, and the order value is significantly higher in B2B transactions. There are different ways to facilitate B2B transactions, including checks, cash, and bank transfer.
However, today’s B2B customers prefer modern digital payment methods over traditional ones. Moreover, offering multiple digital payment methods is essential for online B2B businesses. The popular digital B2B payment methods include the following.
- Electronic Funds Transfer (EFT)
- Credit/Debit Cards
- Electronic Data Interchange (EDI)
- Virtual Payment Solutions
- Automated Clearing House (ACH) Payments
- Online Payment Gateways
Major Differences Between B2C and B2B eCommerce Payment Methods
As mentioned above, two main differences exist between B2B and B2C transactions. One is that the B2B buyer is almost always a business organization rather than an individual. The other significant difference is that the order value for B2B transactions is significantly higher.
However, these are not the only distinctions between B2B and B2C eCommerce payment methods. Moreover, most of the distinctive characteristics of B2B payments apply equally well to B2B eCommerce transactions. Following are some of the most significant differences between B2B and B2C transactions.
Order Value or Transaction Size: B2B transaction size or order value is significantly higher than typical B2C transactions.
Payment Terms: A B2B transaction typically involves complex and negotiated payment terms practically nonexistent in B2C transactions.
Payment Methods: The payment methods in B2B transactions involve complex payment methods, including bank transfers, EFTs, and more. Whereas B2C transactions typically involve card payments, mobile wallets, etc.
Accounting System Integration: B2B eCommerce payments often require unique accounting system integration with advanced automation capabilities.
Credit and Financing Options: B2B eCommerce payment includes flexible payment options like trade credit. B2C eCommerce stores often don’t offer such flexible payment options.
Security and Fraud Prevention: Due to the significantly higher transaction value, B2B eCommerce payment methods require additional security measures, including fraud prevention protocols.Most Popular and Secure Payment Methods for B2B eCommerce Stores
The secret to running a successful B2B eCommerce store with highly flexible payment methods is diversification. It means your B2B eCommerce store should have multiple payment options the customer will likely use.
Interestingly, many B2B buyers prefer to pay through traditional payment options, including paper checks. Hence the popular and secure payment methods for B2B eCommerce include both conventional and digital options.
Following are some of the most secure and popular B2B eCommerce payment methods you can implement on your online store.
Paper Checks
Believe it or not, paper checks remain the leading payment method for B2B transactions. A survey shows that half of B2B payments are through regular old paper checks. Of course, such a transaction is slow, and the lifecycle of such B2B payments averages around 34 days. On the other hand, check payments are highly secure and relatively safe from fraudulent attacks.
Nonetheless, even this age-old B2B payment method is prone to error sometimes. It is also worth noting that paper check payments also come with associated costs, which can fall anywhere between $4 - $20 for each check. You can facilitate paper check payments for your B2B eCommerce store if you have a flexible workflow engine.
However, implementing such diverse B2B eCommerce payments can take time and effort. Hence, it is best to seek the help of an eCommerce expert like Virtina to implement advanced B2B eCommerce payment options. You can even equip your B2B eCommerce store with customized features to better serve your customers.
Automated Clearing House (ACH)
Better known as ACH, Automated Clearing House is the same as check payments, except that the check is digital. As you can imagine, this comes with some predictable advantages. It allows you to significantly speed up the B2B payments compared to traditional check payments.
Moreover, ACH is one of the most popular methods to accept business payments and a perfect combination for B2B eCommerce stores. It is significantly more convenient and faster than paper check payments. Besides taking a little over a day to process the B2B payments, ACH also offers cheaper bank processing.
Wire Transfer
Similar to ACH, wire transfer is another fast B2B payment method. Wire transfer involves transferring money directly from the buyer company’s bank account to the seller’s. It is highly secure as there is no intermediary and is usually the more practical approach. Wire transfers are so safe that it is almost as safe as you accepting a B2B payment from the customer in person.
It is also worth noting that wire transfers do not use batch processing like ACH transactions. Each wire transfer is processed separately, often facilitating more efficient B2B payments. You must make B2B eCommerce payments via wire transfer if your business will likely process large transactions. However, wire transfers have higher bank charges than ACH and paper checks.
Card Payments
Card payments are another viable B2B eCommerce payment method. It involves both credit and debit card payments. With more Millennials taking over decision-making roles, card payments are becoming more popular as a B2B eCommerce payment method. Unlike Boomers, Millenials are more familiar with card transactions online and hence, more welcoming to B2B card transactions.
However, card payments are only sometimes viable for B2B eCommerce payments. For instance, all credit cards have limits, so buyers can’t use them for B2B purchases if the order value is too high. It is also worth noting that B2B customers can now access fully digital invoice financing and credit lines.
B2B Payment Gateways
Retail eCommerce store owners often use online payment gateway integrations to facilitate flexible eCommerce payments. It is a uniquely digital way for merchants to receive (credit and debit) card payments via an integrated system.
With B2B buyers expecting a B2C experience every step of the way, B2B payment gateways are fast becoming popular. B2B payment gateways are an excellent choice considering it is ideal for online payments. However, it can often cause friction in the purchase process if not implemented properly.
B2B payment integration may need to sync with other integrations. Ideally, you must get professional help to ensure safe and secure B2B payment gateway integration. It lets you seamlessly process B2B eCommerce payments via an integrated payment gateway without compromising your site’s integrity.
Cryptocurrency
One of the latest and most secure ways to ensure B2B eCommerce transactions is via blockchain-based cryptocurrency. Some common and reliable cryptocurrencies in the market include Bitcoin, Ethereum, etc. However, more B2B eCommerce companies need to facilitate cryptocurrency payments to become a primary payment method.
It could be because the government does not back cryptocurrencies, and there needs to be more awareness. Even though they are highly secure, it is not a primary B2B payment method. There is always a risk associated with transactions made via cryptocurrencies. Nonetheless, it is still a worthy B2B eCommerce payment method for your online store.
Benefits of Diversifying Payment Options for Your B2B eCommerce Store
Diversifying B2B eCommerce payment options can unleash several benefits for your online wholesale business. Below we discuss the many benefits of implementing flexible payment options in your online B2B store.
Boost Conversion Rates
One of the most significant benefits of diversifying B2B eCommerce payment methods is that it serves the needs of different customers. Moreover, it ensures that the customer can choose their desired payment method.
It is not uncommon for potential customers to abandon their cart simply because their desired payment option is unavailable. Doing so can effectively boost the chances of a customer completing their purchase, leading to higher conversion rates.
Global Audience Reach
Another significant benefit of diversifying B2B eCommerce payment methods is the global audience or market reach. Different countries may have various regulations regarding online transactions, especially regarding bulk orders.
It means a B2B payment in one country/place may not be acceptable in another. You can effectively bypass this problem by diversifying B2B eCommerce payment methods. By offering international payment methods/currencies, you can grow your customer base and expand to new markets worldwide.
Enhance Customer Convenience and Satisfaction
Each business organization has its preferred patent method to manage its accounts efficiently. Some prefer traditional payment methods like paper checks, while others prefer digital ones. It would be best to meet the needs of each customer when it comes to payment methods because not doing so can lead to cart abandonment. It significantly boosts the overall customer experience and enhances customer satisfaction, effectively making your B2B brand more reliable.
Superior Risk Mitigation
Diversifying your B2B eCommerce payment methods can also help you ensure superior risk mitigation for your online store. Depending on just one or two payment methods often leaves your business vulnerable to fraudulent attacks, payment disputes, and more.
Diversifying your B2B eCommerce payment methods helps mitigate exposure to such risks. It enables you to provide alternative payment channels for your B2B transactions and eliminates over-dependency on any specific payment method.
Get the Edge Over Your Competition
eCommerce is highly competitive whether your is a B2B or B2C business. Hence, it would be best to prepare your online store in such a way that it can offer something more to the customer than your competition.
Diversifying B2B eCommerce payment methods is an excellent way to get an edge over your competition. Many online B2B stores still need more payment flexibility. Therefore, ensuring payment flexibility demonstrates your commitment toward customers and provides them a seamless shopping experience.
Improved Cash Flow
As you know, the different B2B payment methods can often have varying settlement times. B2B eCommerce payment diversification allows you to offer a faster settlement for business organizations. Of course, you can only do a little if the B2B buyer opts for a slower payment method.
Most B2B buyers prefer shorter settlement times that offer the most convenient and secure digital payment method. As a result, you can enjoy a steady fund inflow and have better financial management capabilities.
Lower Cart Abandonment Rate
Having limited B2B eCommerce payment options is a recipe for high cart abandonment rates. The same applies if your B2B eCommerce payment method needs to be simplified. Diversifying B2B eCommerce payment methods can help you avoid this problem.
By offering diverse payment options, you can encourage customers to choose the most convenient payment method. B2B eCommerce payment diversification removes friction elements from the purchase process, effectively helping you to minimize the cart abandonment rate.
Boost Customer Loyalty and Repeat Purchases
Customer loyalty is more crucial for B2B businesses than B2C ones, as the former depends heavily on repeat business. Hence, ensuring a positive payment experience should be a priority for online B2B businesses.
Moreover, unique B2B payment methods like credit payments are a must-have for certain companies. Multiple flexible B2B eCommerce payment methods enable you to serve varying customer needs, effectively boosting customer loyalty and repeat business.
Facilitate Complex Business Relationships
One of the unique aspects of B2B transactions is that it often involves complex agreements. Besides that, B2B transactions also have customized pricing and recurring payments. You can not deliver such complex requirements with rigid payment options that offer little or no flexibility.
B2B eCommerce payment diversification can efficiently simplify complex business relationships. It allows you to accommodate various B2B buyers’ unique needs and meet their payment requirements. As a result, B2B payment diversification helps you cultivate long-term business relationships.
Better Analytics and Insights
Another compelling reason to use diverse B2B eCommerce payment options is the access to better analytics and insights. All online businesses need advanced analytics and insights to optimize their operations, regardless of whether it is a B2B or B2C business.
Implementing multiple B2B eCommerce payment methods to your website also gives you access to valuable data. It enables you to access priceless data like payment behavior and customer preferences. As a result, you can better assess customer buying patterns and make better business decisions based on accurate data.
Why Companies Use B2B Payment Software?
The simple answer to why companies should use B2B payment software is customer demand. Today, the average B2B buyer expects the same convenience in shopping they would expect from a B2C eCommerce store. And choosing the desired payment method is one of the most significant needs of the B2B buyer.
Not providing a secure online payment option could be a deal breaker for many businesses wanting to purchase bulk products. As we explained above, offering multiple flexible B2B eCommerce payment methods helps you remove barriers that could stop the customer from completing a purchase.
Companies may find the product they need at the right price and still need to complete the purchase because their desired payment option is unavailable. As a result, such a website could have a significantly higher cart abandonment rate and impact their overall revenue. Moreover, B2B payment software can substantially enhance customer journeys and optimize cash flow.
Top 5 Trends in B2B eCommerce Payments in 2023
Successful eCommerce businesses invest their time and money in the latest trends to keep up with their competition. It is the same when it comes to B2B eCommerce payments. Following are some promising trends in B2B eCommerce payments that you should watch out for in 2023.
Blockchain for Secure Digital B2B Transactions
Blockchain is one of the most secure ways to make digital payments, and more B2B buyers are demanding the same from their suppliers. B2B transactions using blockchain are fast, safe, efficient, and highly transparent. Moreover, blockchain-based transactions require no intermediaries like a bank, significantly reducing transaction costs.
Automation for Quick and Efficient B2B Transactions
Automation in eCommerce is not new. However, automation in B2B eCommerce is growing significantly, and it is high time that you join the club. Automation in B2B eCommerce can include everything from Robotic Process Automation (RPA) to AI chatbots for streamlining online shopping. It can help you schedule advance payments, set up recurring payments, and much more.
Flexible Buy Now Pay Later Option
In 2023, the BNPL or Buy Now Pay Later option will be gaining more popularity in B2B eCommerce than ever. Although it is still a long way from becoming a standard payment option in B2B eCommerce stores, its potential is undeniable. It lets companies purchase goods/services and pay the cost later, preferably in installments. Furthermore, the BNPL option enhances customer loyalty and drives more sales and conversions.
Rising Popularity of Mobile Payments
The rise in popularity of mobile payments is another notable trend in B2B eCommerce payments today. It is easy to understand the need for mobile payment capabilities for a B2B eCommerce store if you consider the convenience it offers. Mobile payments have superior flexibility for B2B eCommerce payments because they allow companies to process payments on the go.
Real-time Payment Processing
Advanced B2B eCommerce stores are now using real-time payment processing. This shift is understandable if you consider the many benefits of instant payments. Companies can get immediate confirmations on B2B payments making their job significantly more straightforward. Furthermore, real-time payment processing helps you optimize cash flow management and minimize payment delays.
Challenges in Implementing Effective B2B eCommerce Payments
Implementing a seamless and effective B2B eCommerce payment capability for your online store comes with challenges. It is always better to prepare for these challenges before facing them. Following are some of the most common challenges in implementing B2B eCommerce payments.
Multiple B2B eCommerce Payment Options Including Check Payments
With B2C eCommerce, it is relatively easy to implement multiple payment options because it does not require complex offline payments. With B2B eCommerce, you may need to integrate various complex payment methods, including paper check payments. However, an eCommerce expert like Virtina can quickly implement diverse payment capabilities in your online store.
Offering Credit Lines and Personalized Discounts
One unique aspect differentiating B2C and B2B companies is that the latter offers credit lines and personalized discounts to its customers. Implementing such capabilities to your online B2B store can be challenging if you do not have the necessary expertise.
Purchasing Approval
B2B eCommerce purchases may sometimes involve multiple buyers in a single order, which can be confusing. An efficient online payment system can help you in such situations. The software system should be able to track and save purchase orders and send the information securely to various departments for purchase/payment approval.
Ensuring B2B Data Security
Data security is more crucial in B2B eCommerce than it is for B2C companies as it deals with significantly higher order value. Any breaches could compromise the sensitive data of the buyer and seller companies. It would be best to prepare for this by integrating advanced security solutions into your B2B eCommerce store.
Reconciling Payments and Managing Cash Flow
Another significant challenge with implementing B2B eCommerce payments is payment reconciliation and cash flow management. You may have to spend hours reconciling payments and managing cash flow without the right software solutions. Fortunately, you can bypass this challenge with the help of a customized solution for your online B2B business.
Tips to Optimize B2B eCommerce Payments for Your Company
Optimizing B2B eCommerce payment for your company can be challenging, especially if you don’t have a professional to help you. Here are five tips that can help you with B2B eCommerce payment optimization.
Offer Multiple B2B eCommerce Payment Options
Diversifying your payment options is one tip that can potentially save your B2B eCommerce business. It means setting up multiple B2B eCommerce payment methods, including offline payment options like paper checks.
Automated Invoicing and Payment Reminders
Consider investing in an automated software solution to automatically send invoices and payment reminders to customers. Although it may not sound like much, you can significantly improve cash flow with this simple solution.
Invest in a Robust Payment Gateway
With more and more B2B buyers expecting a B2C-like shopping experience, investing in a robust payment gateway is quickly becoming necessary. It can help you keep up with customer demands and provide them with superior payment flexibility.
Adapt to Digital Transformation and Technology
Modern eCommerce businesses can not escape the changes made by digital transformation and the latest tech. The only effective way to keep up with these radical changes is to embrace digital transformation and use the latest technology to your advantage.
Monitor and Analyze Payment Data
B2B eCommerce payment optimization is only complete if you regularly monitor and analyze payment data. It enables you to identify purchase patterns and assess user behavior to optimize your B2B eCommerce payments better.
Final Note - Get Help From B2B eCommerce Experts
This guide can help you implement multiple B2B eCommerce payment methods to your B2B website. However, a guide can not replace the technical expertise of an expert. It is always best to seek professional help to optimize your B2B eCommerce payments considering the potential complexities of B2B transactions. The experts at Virtina can help you implement custom B2B eCommerce payment capabilities tailor-made for your business.
Best Payment Solutions for B2B eCommerce Stores - Frequently Asked Questions (FAQs)
Yes, diversifying eCommerce payment methods is necessary for your online B2B store. It enables you to serve the unique requirements of various companies and effectively grow your sales and conversions. B2B eCommerce payment diversification should include multiple payment methods, including paper check payments.
The most significant advantages of implementing multiple B2B eCommerce payment methods include higher conversion rates and extensive market reach. However, there are many more advantages to implementing flexible and secure B2B eCommerce payment methods. You should seek professional help to get the most out of multiple B2B payment options.
Implementing multiple B2B eCommerce payment methods allows companies to choose their desired payment method. It minimizes cart abandonment due to a lack of payment flexibility. As a result, more companies can make purchases on your B2B eCommerce store, which results in a higher conversion rate for your online B2B store.
Some primary security measures to ensure seamless B2B transactions include utilizing robust encryption, fraud detection systems, and ensuring PCI compliance. It would be best to consider using tokenization, two-factor authentication, and highly secure payment gateway integrations to enhance the security of your multiple B2B eCommerce payment methods.
Several payment methods are ideal for global or international B2B transactions. PayPal and international bank transfers are some of the leading B2B eCommerce payment methods to facilitate flexible B2B transactions. Ideally, you should seek professional advice to add custom B2B payment capabilities to your website.
An advanced B2B payment software can help you optimize various aspects of your payment operations. It can help you automate multiple processes, including invoicing, reconciliation, and payment processing, and generate actionable reports. Besides, you can create custom software with our experts’ help to further streamline your operations.
Even though mobile payments are not the most popular B2B eCommerce payment method, it is best to have the payment option on your B2B website. Mobile payments offer superior flexibility and convenience and enable companies to purchase on the go. Mobile payments will likely have a much more significant role in B2B eCommerce soon.
Yes, you can use blockchain-based B2B payment methods on your website. Blockchain-based technology can significantly enhance the security and transparency of B2B payments. It effectively allows you to build customer trust. You can use blockchain to provide smart contracts and immutable transaction records to your B2B customers.
Using real-time payment processing for your B2B eCommerce transactions has several advantages. It lets your B2B company quickly ensure transaction confirmations and can significantly enhance cash flow management. Besides that, real-time payment processing is an ideal way to minimize payment delays and optimize your order fulfillment process.
Cross-border B2B payments can be complex for companies considering they involve currency conversions. It would be best to consider the fluctuating exchange rates and other factors, such as additional fees, potential delays, and regulatory compliances. Hence, seeking professional help to implement cross-border B2B payments is best.
One of the best ways to overcome challenges in cash flow management is to utilize an automated payment reconciliation system. You can use integrated accounting software to regularly track cash flow and optimize credit processes associated with credit management. Our experts can help you enhance cash flow management for your B2B business.
Selecting an ideal payment gateway for your B2B business can be challenging. Some of the most significant aspects to consider when choosing a payment gateway include security features, eCommerce platform compatibility, international payment capability, and more. However, the easy way to select a payment gateway is to consult an expert.
Automation can make various processes simple for B2B companies. In B2B eCommerce, you can use automated invoicing and payment reminders to reduce manual errors. Besides, it lets you speed up payment cycles and ensure timely customer payments. As a result, you can significantly improve cash flow for your B2B business.
Digital transformation will play a crucial role in B2B eCommerce in 2023. It can help you optimize various aspects of a B2B eCommerce store. Besides streamlining payment processes, it enhances your website’s automation capabilities and real-time visibility. As a result, you can significantly improve customer experience.
Considering the complexity of B2B transactions, it is best to seek professional help to implement multiple B2B payment methods. B2B transactions also come with several regulatory compliances, which can be challenging to navigate without proper expertise. An expert like Virtina can help you navigate these challenges and ensure seamless B2B payments.
