What are B2B Payments?
Current demand and innovation motivated a current shift to service B2B payment systems. This becomes more vital for the growing international e-commerce industries. Any payment system should consist of essential steps to your business’s payment cycle. FintechMerchantAccounts can set up a payment API for your business to manage all types of B2B payment transactions. All of which need to go through your established cycles.
How does electronic B2B payment processing work?
Your companies payment solutions can differ according to the unique needs of each business. Electronic processing is the primary transaction mode for B2C service. Nevertheless, most of the organizations today still count on paper checks and Automated Clearing House (ACH) transfers. The rooted procedures and systems that have remained in the location are difficult to redefine for electronic deals. For business exchanges, electronic processing still isn’t easily structured.
An overview of B2B Payments
The purchasing and selling procedure in between companies have their own inner functions. An understanding of business-to-business (B2B) payments and procedures helps to understand the practices for present patterns, and the altering landscape that will make use of digital choices. Service companies require different kinds of products for different requirements, while retail sales have an intricate internal processing system that accommodates greater sales and quantities. Your payments need to go through certain channels to deal with requirements.
How do recurring online payments work?
B2B ongoing payments are more complicated than their B2C equivalents. Typically recurring payments include membership or subscription-based elements. That is, your customer develops a routine sales relationship with you in order to ease procedures on both your and their ends. This sounds like a simple solution, however, it involves some work.
Automation is an efficient way for you to process a payment cycle without excessive interaction. An automatic payment system with FintechMerchantAccounts will do all the work for you utilizing our software application and ingenious technology without you having to spend any valuable time in the process. This is an increasing pattern in the business payments market, cutting processing time by up to 80%.
Outsourcing is also a popular payment option. Numerous companies will employ a company to follow through the steps above, which oftentimes makes for a faster process overall. This requires no extra overhead and a relationship with the outsourced company to guarantee you compliant practices.
With a B2C transaction, the process is different. Your customers purchase from you in person, and they normally pay at the point of sale. That is, the cash is exchanged upfront or at the very moment, your goods or service are rendered. This is possible since digital systems can quickly do a sale on a single purchase at a lower expense. There is no internal processing that needs to occur with a B2C deal, it is a basic immediate transfer of funds.
B2B Payment Cycle
If your company opts to utilize an internal accounts receivable system, it will permit you the most control over the transaction. But you will also have the most manual labor. In this scenario, after the purchase is started from one business to another the seller needs to approve the sale and its terms. This where your company accounting comes into play. Including issuing a purchase order and sending an invoice through each party’s appropriate channels. Upon approval, the order is processed. An invoice is produced and then sent to the purchaser for payment, generally within 1 month. To perform payment, electronic invoicing is on the increase. – In America, over 90% of companies use digital invoicing. The final action is a payment that includes a receipt, or, sometimes a late fee is applied.
Recurring payments are available on invoices and installments alike, which is a benefit when your work with organizations all over the country. If you deal with international sales, you need to account for taxes and currency exchanges. The advantage of automating your recurring payments is that your buyer can be debited for payment early in the process. Our technology allows transactions to be converted and settled in local currency or whichever is their favored payment method. However, not all markets accept recurring billing, which indicates this service has its limits. FintechMerchantAccounts can set your business up with our API so you can enable your business to do this.
5 most typical B2B payment methods
While checks are rather old for B2C deals, they remain a typical form of payment in B2B sales. Checks do have numerous advantages for you, the very first being a clear paper trail throughout the payment cycle. In some ways it is why companies like them so much. However, there are disadvantages as well. Human error in making up the check will sometimes need a new check to be cut. Checks that bounce develop a system of repercussions to be handled. The amount of people involved in the process increases overhead. Lastly, clearing checks takes a longer period of time.
An ACH is basically the electronic version of writing a check. In this option, your payment is pulled from the buyer’s bank account and deposited into your account. This works well with arranged recurring payments. Authorization should be gotten from the purchaser in order to establish this system, however, some people do not want to offer their bank details. That said, this is a one-time deal, then going forward the payment happens with no effort for either you or your customer. We can set up ACH for your businesses for both recurring scheduled payments, and for routine purchases on an as-needed basis.
3. Credit Cards
Charging a card is an easy approach to payment. This payment method tends to be a trusted method to guarantee payment can be accepted, nevertheless, credit cards are well-known for high costs on both sides of the transaction. Charge cards also have spending limitations, which can be a problem if your business has high-volume company sales.
4. Wire transfer
This standard payment system has been around for a very long time. Wire transfers involve money moved from one bank to your business bank account through a “wire.” While safe, as far as making sure adequate funds are readily available is concerned, wire transfers require many actions to set up and perform. Wire transfers do not usually have currency limitations on exchanges however they can be very cumbersome.
5. Electronic Funds Transfers
A growing payment method, electronic funds transfer (EFT) is a digital payment. The function is not much different from an ACH or wire transfer– in fact, those two payment choices are types of an EFT. EFT is a payment solution that effectively moves funds at a lower cost, a quicker rate than wire or ACH transactions since it is entirely digital. As automation increases, payment processors like FintechMerchantAccounts prefer EFT. According to ystats, 59% of payments amongst three in were made by using this option.
We are an innovator in streamlined payment solutions for your business. Whether you are a solo entrepreneur or a multi-national corporation, we can help you by incorporating all of the above payment options into our one API system. If you want more information on the payment options described here as well as a demo account of our API please contact us. You can call us at 617-918-7235. If you would like more information by email you can click HERE.
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