After the payment digitalization happened, the world was never the same. We have little to no cash, get angry when a transfer from a friend takes more than a minute, and actively use numerous payment getaways.
B2C has numerous options to satisfy the needs of every customer: ApplePay, GooglePay, credit or debit cards, etc.
B2B is… well, not that flexible. According to AFP Electronic Payment Survey 2019, 42% of businesses still use payment checks. Moreover, it is considered to be the lowest rate ever and is excitedly discussed.
It sounds ridiculous when there are so many more convenient options out there. Therefore, the most you can do to improve your B2B payment process is to update your payment methods.
We will learn how exactly digitized payments can improve your B2B payment and how to choose the right digital payment method for your business.
How Digitalization Influences Your B2B Payments?
Digitized payments are beneficial to both business customers and brands, and here is why.
Digital payments need less time to proceed than paper checks. It can take from mere seconds to 1-2 days. Paychecks may take up to 15 days to clear.
Cash can be easily stolen by thieves or company employees, and you may discover that the paycheck was fake or the customer does not even have that money. Digital payments have several walls of security.
It was annoying to have to drive to the bank to receive or send the money. With the pandemic happening, it also becomes dangerous. Most digital payments methods do not require your presence in a bank.
What Digital Payment Method Is Simple And Convenient For B2B?
In fact, there is no fits-it-all payment. Every method is more or less suitable for the company. Let’s take a closer look at all the methods to find what suits your business type better.
Credit cards are widely utilized in B2C and are slowly gaining popularity in B2B, as more millennials enter the market.
Credit cards are good for:
- instant operations
- small or medium transactions
- businesses that have a corporate credit card
- businesses that do not have enough money at the moment but need to pay ASAP
- for international businesses
Credit cards have such cons as:
- high fees
- unauthorized payments and fear of losing the card or stealing
- companies usually do not keep big sums of money on their credit cards so no big transactions
Electronic transfer of money is happening through SWIFT which makes this method both reliable and quick.
Wire transfer is mainly used for:
- quick transfers
- businesses who have bank accounts
- international businesses
- payments can be done anytime
The main disadvantages of wire payments are:
- too much paperwork involved
- a need to be present at the bank
- expensive ($10-35 inside the country and $43 international)
ACH is another electronic transfer but it is suited for the US only. Still, it is popular within the country because:
- It is less expensive than wire transfers. Sometimes they can be free
- ACH can both send and request payments
- it is good for businesses who rely heavily on profit margin
- the payment may be reversed if any error occurs
- they are better for regular payments
- it is more secure (for instance, Cooltechzone built their business around security trust this method only)
There are some weaknesses too:
- it is limited to the US
- slower processing than wire transfers
Digital Payment Platform
Almost everyone uses some form of digital payment platform. It may be PayPal, Amazon, Venmo, GooglePlay, etc. However, it is not really popular within B2B.
Some of its advantages include:
- no need to go to the bank
- proceed payments from both desktop and mobile devices
- quick transfers without banks being involved
The main reason why it is hardly usable in B2B is costly fees that are higher than any other payment method.
Improving payments in B2B can be tricky sometimes. Since improvement usually means meeting customer expectations in speed, security, costs, and personal preference.
Consequently, you have to choose a decision that works best for the majority of the clients or use multiple methods.
If you are an international company, you will have to deal with wire transfers or credit cards and enjoy fast but costly services. If you work only with the US partners, ACH seems to be the best solution but be ready for the long wait (no longer than paper check though).
In order to make payment more convenient and automated for both you and your customers, you may use such systems as Apruve. You can enjoy multilingual support and invoices, credit management, and customer onboarding there.
Dean Chester is an online security enthusiast and now is writing VPN reviews at https://cooltechzone.com/. Actively self-developing, keen on online marketing and new technologies. Writing is his hobby, a way to escape from everyday routine and inspire others.
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