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Choosing a B2B cross-border payment solution

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJul 20232 min read

Today’s economy is global. It’s also increasingly online, which throws open the doors to international markets no matter your business size. For B2B businesses, the ability to accept cross-border payments is essential if you wish to have a global presence. Fortunately, there are more solutions than ever to help you get started with accepting B2B cross-border payments.

What are B2B cross-border payments?

When one business makes a purchase from another business based in a different country, this is a B2B cross-border transaction. And when payment is submitted, it will be a B2B cross-border payment. B2B cross-border payments are standard practice for global firms or those who purchase from foreign manufacturers and suppliers. Cross-border B2B payments can also be used to pay employees based in another country, or to send funds to a foreign subsidiary.

While domestic payments involve the same currency and bank network, cross-border payments are more complex. They involve multiple currencies, requiring conversion at fluctuating exchange rates. These payments also typically involve more processing steps due to the need to travel through multiple financial intermediaries.

What are some cross-border payment methods?

Like other business payments, cross-border B2B payments begin with an invoice. The supplier sends an invoice to the buyer after delivering goods or services. This invoice is usually more detailed than a B2C invoice would be, showing applicable bulk discounts, taxes, and installment schedules. For international invoices, it will also involve various currencies and preferred payment methods.

Cross-border payment methods vary by region. Some of the most popular options include:

Credit cards – Options like Visa and Mastercard are accepted internationally, but they do involve high fees.
ACH payments – These bank-to-bank transfers are sent through the Automated Clearing House network within the United States or comparable foreign network.
Wire transfers – Services like Western Union let you wire large sums of money directly to a business’s bank account in another country. You’ll need to have the right bank account numbers and codes to initiate the transaction.
Digital wallets – Services like Apple Pay, Google Pay and Alipay let buyers choose from a variety of stored payment methods for convenience.

Challenges of B2B international payments

Before choosing the right B2B cross-border payment solution, it’s helpful to identify what the primary challenges are. This begins with exchange rates, which change from one moment to the next. Differences in taxes and shipping regulations are also important to consider. It’s important that you comply with all regulations to get your products in and out of the country, while paying applicable taxes to avoid delays.

Many of the popular payment methods listed above come with extra fees tacked on once you go global. For example, wire transfer fees increase the cost of doing business, as do intermediary bank fees and currency exchange fees.

What to look for in the best cross-border payment solutions

A good B2B cross-border payment solution solves many of the problems above.

It cuts down on exchange rate costs and intermediary fees
It automates accounts payable workflows by issuing invoices in foreign currencies
It automatically reconciles your remittances, invoices, and payments according to exchange rate fluctuations
It stores relevant tax and compliance documentation so you can be sure you’re up to code for shipments

Ultimately, the best international payment solution addresses all the unique challenges that come with B2B cross-border payments. As you compare your options, make sure that your system can support the payment methods you prefer, including all relevant currencies and exchange rates. Examine the fee schedule closely to see if you’ll pay more than the usual per-transaction rates. Timing is also important. What do the settlement times look like? Does the solution offer real-time payments or is there a delay?

If you’re looking for a reliable cross-border payment solution for your B2B business, GoCardless is a great option. It enables businesses to receive international payments from over 30 countries at real-time exchange rates. This reduces fees with a transparent pricing plan, while also cutting down on processing time and delays.

We can help

GoCardless is a global payments solution that helps you automate payment collection, cutting down on the amount of financial admin your team needs to deal with. Find out how GoCardless can help you with one-off or recurring payments.