Ecommerce is a growing trend in B2B sales. For example, in 2020, almost one-third of all wholesale trade sales were conducted via ecommerce channels.
As B2B businesses become more comfortable buying and selling online, B2B payments must catch up. Paper checks are still one of the most popular forms of payment for business-to-business accounts, with 81% of businesses saying they wrote checks to other companies as of 2020. Around that time, checks accounted for around 42% of all payments between businesses.
B2B companies that sell via the web have a vested interest in the growth of ecommerce payments in B2B settings.
In this article, I'll explain how to use payment processing for B2B ecommerce sales.
What Are The Most Common Forms of B2B Payments?
For B2B buyers, checks are often a preferred payment option because they support traditional paper trails and accounts payable processes. However, many businesses have payment methods set up for use on ecommerce platforms.
Here’s a quick rundown of some common forms of B2B payment.
This tried-and-tested traditional payment method works well for customer businesses because, for decades, all invoicing and accounts payable processes were built around workflows that involved cutting checks. There are still some businesses that will pass up on deals via online stores in favor of vendors that let them write checks.
ACH bank account transfers
ACH payments, or automated clearing house transactions, are electronic payments that let clients pay with a banking account. Businesses that prefer to pay with checks may be able to integrate ACH payments into their processes easily, which can support ecommerce shopping when the online store accepts this type of payment.
Credit card payments
If you’re setting up an ecommerce platform, credit card payments may be easiest for you to accept. Many businesses are willing to pay with credit cards, especially if they can use a debit card attached to a business checking account.
Other B2B payment types
As ecommerce and digital payments increase in popularity, businesses are expanding how they pay for items.
Other popular payment methods include:
- Non-ACH electronic funds transfers, such as wire transfers: These EFT options can be especially helpful for cross-border payments transferred between the client and business financial institutions.
- Digital wallet payments, such as Google Pay or Apple Pay: While still less common in B2B scenarios, these types of payments are gaining traction in the sector.
- Online payments through services such as PayPal: Small business resources such as PayPal Working Capital make this an even more popular choice.
- Cryptocurrency: Many businesses are expanding to accept payment via Bitcoin and other cryptos.
How Can You Encourage Digital B2B Payment Methods
So, how can you encourage businesses to make payments digitally to foster ecommerce sales?
The steps below help you prepare to support clients and customers with online payment processes that work for them.
1. Choose a B2B payment processor
First, you need a payment gateway, payment processing service, and, potentially, a merchant account. These are the payment systems that let you securely accept bank transfers, credit card, and debit card payments.
The exact details of the setup depend on which payment platforms you choose. Start by looking at any options provided by your B2B ecommerce platform. You should also consider the cost of the service. Take time to understand transaction and processing fees, as you may end up paying a bit every time someone pays you.
2. Support business-specific needs in checkout processes
When you set up your payment solution, ensure that your checkout processes are likely to meet the needs of your target audience. It’s especially important to consider major differences in how businesses pay for orders versus how consumers pay.
For example, consumers are used to paying upfront when they order. Businesses may be used to paying with Net 30 terms. Businesses may also need to easily integrate a purchase order number into their ordering and payment processes.
By supporting some of these needs, you encourage business clients to purchase from your online store.
3. Create automated processes for efficiency
B2B transactions are often more complicated than B2C transactions. When you integrate automation and fintech resources such as electronic data interchange (EDI) options, you can streamline processes.
For example, you might need a way for business clientele to order items, receive an electronic invoice, and pay that invoice. You also need a way to correctly credit the account on your end once payment is made. Automation and EDI can help you accomplish these goals.
4. Support varied payment terms
Take time to build shopping carts and payment processes that support a variety of business-friendly payment terms. Some options to consider include:
- Recurring payments: Create subscription-style credit card processing options for businesses that want to automate orders of items they need on a regular basis.
- Buy now, pay later credit: Partner with a buy now, pay later (BNPL) credit lender that’s willing to work with businesses. This is one way to support small business clients that may need inventory before they establish consistent cash flow.
- Net 15 or 30 terms: Support more traditional business accounts payable structure by matching standard terms and allowing businesses to pay upon receipt of goods or 15 to 30 days after shipment.
Common Challenges With B2B Payment Processing
Implementing B2B payment systems isn’t always as easy as implementing B2C shopping carts and payment pages.
Here are a few common challenges you might face:
- Handling a variety of business payment types: Taking as many types of payment as possible widens your potential client base. However, it also means choosing a payment processor that supports those options.
- Supporting an excellent customer experience: Your B2B ecommerce shopping carts should work seamlessly and let you support pricing discounts, and other perks businesses may be used to.
- Keeping your accounts receivable in order: You’ll need business processes to correctly allocate incoming payments to client accounts and statement line items and account for transaction fees and other details.
- Supporting multi-level approval for purchases: Depending on the cost and complexity of your goods or services, you may need to support extensive PO and approval processes for clients to ensure the right decision-makers are behind the buy.
Invest In B2B Payment Solutions
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More great ECM content:
- What Is A Payment Gateway & How Does It Work For Your Online Store?
- Ecommerce Credit Card Processing Guide: How To Set Up & Accept Cards
- How To Optimize Your Payment Processing For Ecommerce
- How To Choose The Best Payment Processing For Your Ecommerce Business
- How To Use Ecommerce Platforms For B2B Sales
- 10 Best Payment Gateway Providers In 2023
- 10 Best Payment Processing Software in 2023
- 10 Best Buy-Now-Pay-Later (BNPL) Platforms in 2023