It’s taken a while, but the era of slow legacy B2B payments is ending.
Businesses are demanding faster, more secure payment options to stay competitive, and digital B2B payment solutions are stepping up.
This is great news for business leaders looking to make collecting payments quicker and easier. Yet if you’re one of them, you’re probably also struggling with:
- Finding the time in a busy schedule to work out which payment options are the best fit for your business
- Understanding the complex technical jargon that comes with these products, especially if you’re not deeply involved in financial operations
- Knowing which business-to-business payment solutions will improve your company’s financial performance and return on investment.
However, it’s well worth clearing these hurdles. Businesses with the right payment systems for issuing funds achieve faster cash flow, reduced operational costs, and improved customer satisfaction.
Those who can do this most effectively stand the best chance of becoming a leader in their industry. As Dimitri Raziev, CEO of B2B SaaS Software firm Kolleno, puts it: “In the race to redefine the future of payments, the goal isn't merely to keep up—it's about leading the tech-enabled charge”.
So, which methods are at the front of this “tech-enabled” charge, and which ones are businesses using right now?
This guide looks at the six most important B2B payment solutions for issuing payments around right now, and how you can make them part of your business strategy.
What is the payment process for B2B (and how does it differ from B2C)?
“What is B2B payment processing?” may seem like a basic question to ask, but it’s good to get it clear when looking at the best B2B payment solutions for your organization.
The B2B payment process involves the exchange of financial value between two businesses.
B2B payments typically involve larger sums, and more complex invoicing, and often rely on methods like ACH transfers, wire transfers, or purchase orders.
Unlike B2C payments, where credit cards and digital payments dominate, B2B transactions are more diverse and influenced by industry standards and company culture.
Choosing the right B2B payment system for issuing money seriously impacts business performance, so it’s worth spending more time making sure you get the right one.
Want to speed up your workflow with a real-time B2B payment solution? Sign up with Berkeley Payments to find out how you can integrate our smart platform into your business in just minutes.
The 6 most popular B2B payment solutions around right now
All the talk is about digital payment methods right now, but many B2B payment processing companies still use legacy solutions or a mix of both.
Here’s a list of the six business-to-business payment options you’re most likely to come across when it comes to issuing business funds.
1. Paper checks
Believe it or not, checks are still a popular B2B payment option in the US and Canada, despite their drawbacks.
For some businesses, checks feel familiar and reliable. They provide a tangible paper trail of transactions and business owners (particularly older ones) feel more at home with the standard check fees than the often-complicated payment terms and fee schedules of some online providers.
One third of US and Canadian businesses still use paper checks, according to a recent JP Morgan survey, but they must deal with several pitfalls when using them to issue payments.
Processing them is time-consuming and can cause delays in accounts receivable management, and that’s not to mention the potential for fraudulent use.
The declining use of paper checks across the US and Canada
Source: JP Morgan
Suppliers may even penalize you if you rely heavily on checks to pay them, giving preferential treatment to non-check payers that are better for their cash flow.
However, the tide is turning. Businesses are embracing faster, more secure B2B payment solutions, including Echecks, an electronic payment method that removes the downsides of its paper cousins.
While paper checks may persist for some time, their days as a dominant option seem numbered.
2. Wire transfers
Wire transfers have long been the go-to method for large, high-value B2B transactions.
Ideal for time-sensitive deals or international payments, they offer a near-instant funds transfer, but this speed comes at a cost.
The process of carrying out a wire transfer involves manual data entry, which, along with the high security involved, is what you pay for via transaction fees. Yet, these processing fees are substantial and make wire transfers a poor strategic option if you want to minimize operational costs.
Data from Bankrate shows that the average cost of an outgoing US wire transfer was $26 in 2023, increasing to $44 to wire money overseas.
The average cost of a US wire transfer (2023)
Source: Bankrate
Manual entry also increases the risk of human error, which isn’t great when wire transfers are irreversible. Mistakes are costly and take a while to fix.
Wire transfer fees can be substantial, particularly for cross-border payments. Setting up a bank transfer often involves manual data entry, increasing the risk of errors and delays. While security is generally high, the irrevocable nature of wire transfers means mistakes can be costly.
As B2B digital payment solutions continue to evolve, wire transfers are becoming less common routine transactions, reserved instead for high-stakes, time-critical payments.
3. Credit card payments
Credit cards remain a popular choice for B2B transactions, allowing us to make deferred payments and help along our cash flow.
Payments are also quick, which is a key reason why they still have their place in the payment ecosystem.
Yet while credit cards offer short-term flexibility, their interest charges can erode these benefits if balances aren't managed carefully.
Credit card payment fraud also remains a persistent threat, with a third of small business owners impacted by it, according to a Forbes poll.
Credit cards tend to make business administration more complex, too. If you use one, you must manage both credit card and bank statements.
Like wire transfers, credit cards look more likely to drop out of use over the coming years, with more holistic options stepping up.
4. Automated Clearing House (ACH) Payments
Automated Clearing House (ACH) payments offer a more efficient alternative to checks and wire transfers by electronically transferring funds between bank accounts.
ACH is most common as a cost-effective and secure method for recurring payments such as payroll, rent, and utility bills.
Unlike wire transfers, these payments typically have lower fees and processing times, and transactions are less prone to errors compared to manual check processing.
39% of US and Canadian businesses still use them to regularly pay suppliers for these reasons, according to online publication TryJeeves
.
The most common B2B supplier payment methods
Source: TryJeeves
ACH payments do have their limitations, however. Unlike wire transfers, payments generally take a few business days to clear, which may not be ideal for time-sensitive transactions.
The decision to use this method often comes down to payment type. For high-volume, recurring payments, ACH is a sensible bet. For one-time large payments or urgent transactions, a wire transfer is usually the best way to go.
5. B2B payment gateways
Remember the birth of online payment providers? PayPal was at the forefront of the payment gateway revolution followed by the likes of Stripe a few years later.
Now things have progressed so that B2B payment gateways are the digital arteries of modern e-commerce, not to mention other business sectors.
Swift and secure, they process real-time payments between buyer and seller and remove the need for manual data entry. Their speed helps business users build solid relationships with their suppliers, even without in-person interactions, as they can promise rapid payments upon payment or receipt of goods.
Payment gateways can also easily integrate with financial software making it easier to manage accounts payable and subscription payments.
The success of payment gateways has led to a booming industry that includes a versatile suite of payment services, including credit cards, debit cards, virtual cards, and digital wallets. These are often packaged into an all-in-one payment platform, which we’ll cover in the next section.
6. B2B payment platforms
B2B payment platforms are a growing subsector as they offer an all-in-one financial service of multiple automated features including:
- Real-time payment processors or gateways
- Automated invoicing
- Recurring billing features
- Swift accounting integration
- Advanced reporting tools
This holistic approach helps businesses reduce the time and resources they spend on payment management. Staff can instead focus on core business activities that help the business innovate and grow.
These platforms typically come with built-in tools that collect data to produce detailed reports which help us to make financial decisions and identify payment trends.
Security is another big plus. The best B2B payment platforms give us a glimpse into the future of biometrics by boasting the latest security features, including facial recognition and fingerprint verification.
Ultimately, the adoption of B2B payment gateway software is a strategic move that positions businesses for long-term success.
What is the best payment method for B2B? Try Berkeley’s embedded ‘Bank-in-a-Box’ platform
The online world now has many different B2B payment methods on offer for businesses, but not all of them are a great fit for your business. Searching through them to find the right one is a time-consuming and complex task.
Berkeley’s B2B payments platform helps simplify this process by ticking many of the boxes you have on your payment checklist. We use automation to cut down on manual work and slash the risk of human error so that you can avoid the fuss around B2B transactions.
Getting started with Berkeley is easy, too. We use a single application programming interface (API) integration to quickly embed into your business’s operations.
Here’s a rundown of our platform’s built-in features.
Flexible API integration
Pay out funds to suppliers, customers, and employees instantly via a developer-friendly API that beds into your business operations within hours, rather than weeks.
A bouquet of financial services
Pick and choose from our selection of payment features, including ACH, EFT, and real-time payments to streamline your outgoing payments.
You can also issue customized payment and gift cards with 24/7 support for all your cardholders via our virtual card issuing API.
An example of Berkeley’s white-label gift card powered by Mastercard
Branded payout portal
Infuse your payment service with your brand identity, so that you can build customer trust and loyalty. We issue Visa and Mastercard cards emblazoned with your company name and logo.
Scalable infrastructure
Dial up or down your service according to demand so that you can ride the wave of busy periods.
Advanced reporting features
Track payouts, reconcile transactions, and gain valuable insights through the client dashboard to stay on top of your business's financial health. You can easily integrate our platform into your company’s accounting software to gain easy access to these.
Berkeley’s user-friendly dashboard
Best-in-class security
We use encryption and other technologies to protect data so that all our business transactions come with minimal risk and maximum fraud protection.
Multiple payment methods
We support a wide range of payment functionalities, including VisaDirect for instant fund transfers and Interac e-Transfers in Canada, as well as a host of other popular B2B payment providers.
We also link to digital wallets which makes navigating cross-border payments easier than ever thanks to secure and efficient digital processes.
Berkeley's white-label fintech platform is your launchpad to a brand-new long-term revenue stream, without the heavy lifting.
Our seamless integration and robust infrastructure will give you the tools to manage payments, build loyalty, and drive revenue.
Don't just watch the competition profit from embedded finance. Take control of your financial destiny with Berkeley.
