Best B2B Payment Solutions for SMBs

Whether it’s placing an order with a supplier or contracting an agency to take charge of your marketing strategy, there are a huge number of B2B transactions that occur on a regular basis.

When it comes to volume, B2B payments by far eclipse their B2C counterparts. Businesses tend to order in greater bulk and at a higher value than consumers. For the sake of convenience and security, B2B transactions are often facilitated digitally. In fact, a 2020 Gartner report states that 80% of B2B transactions will take place over digital channels by 2025. 

And when you make or receive any payment as a business, it’s important to consider any transaction fees that you may incur. This is where B2B payment systems come into play. These allow qualifying merchants to take advantage of lower processing fees for large transactions that are typical of B2B payments.

As well as considering these rates, you should also think about whether the payment system can accept a variety of different payment methods and how it deals with invoicing. Keep reading to find out more about B2B payment solutions and how they can support your business.

What are B2B payments?

B2B payments are transactions that occur between two businesses rather than between a business and customer (B2C) or two individuals (P2P, or Person to Person). B2B transactions tend to be larger and involve different processes that make them more complex than B2C payments.

Benefits of B2B payment solutions

Embracing B2B payment solutions can benefit your business and your clientele in a number of ways. These include:

• They provide security assurances.

• Added automation helps to streamline your business cash flow.

• Digital records of transactions are created automatically and stored centrally, enabling businesses to better keep track of their accounts receivable.

• They ensure a frictionless buying process that helps to improve your customer relationships.

Popular B2B payment methods

The cash flow requirements of a business are invariably more complex than their domestic counterparts. As such, flexibility is extremely important in B2B payments. Businesses that service other businesses benefit from offering a variety of payment options to help their clientele to better manage their business finances. 

Some popular B2B payment methods include:

• Payment gateways 

• Paylinks (these can be attached to the customer’s invoice)

• Electronic bank transfer (Bacs, CHAPS, Instant Bank Pay etc.)

• Company credit (enabling customers to pay for their purchases later or spread the cost over an agreed period)

Best B2B payment solutions

Let’s take a look at some of the most trusted B2B payment solutions on the market today.

GoCardless

For B2B payments, GoCardless offers easy access to bank payments, allowing businesses to lower their costs, reduce failure rates, and save time on their payments processes. Ease of use and automation are valuable to businesses. GoCardless makes things easy for merchants, providing a single dashboard to access all their payment data. Furthermore, GoCardless integrates with 350+ business software solutions, such as major accounting platforms such as Xero, saving businesses time and money on financial admin and credit control. Finally, GoCardless can collect payments in Dollars, Euros, and other currencies for direct deposit into UK bank accounts at the most favourable exchange rates for businesses with overseas customers.

PayPal

One of the most common and well-established platforms for B2B payment processing is PayPal. Some of the main features that you can access with PayPal include accepting online payments, barcode scanning, inventory tracking and e-commerce capabilities. They also offer online invoicing and even buy-now-pay-later financing options. One of the key strengths of PayPal is that it is widely recognised and accepted worldwide.

You’ll probably want to start a business account if you’re using PayPal as your B2B payment system, and pricing for this varies depending on the specific features that you require.

Stripe

Another big player in the world of B2B payment methods, Stripe is a US-based company that aims to make online transactions simple. Their focus is on ease of use, and new users should be able to get to grips with the interface relatively quickly. In addition, they offer an API that allows you to customise the platform and streamline the process, but you’ll need a developer to do this.

Stripe operates on a pay-as-you-go basis, meaning that you are charged as a proportion of your transactions. Depending on your sales volume, this could end up being cheaper or more expensive than paying a flat, monthly fee. Particularly for those with very large transactions, Stripe could be a relatively expensive method for B2B payment processing.

Square Payments

Square Payments is a B2B payment system that works well for businesses that also have a lot of B2C transactions, since they offer a free POS system that allows you to keep track of customers and sales. In addition, they have competitive transaction fees and do not impose any chargeback fees.

The downside of Square Payments is that they do not serve high-risk businesses, so you may not be able to use this if you operate in an industry such as travel or finance. Moreover, their capacity for cross-border payments is limited, so it may not be the best choice for multinational businesses.

Wise

If you’re a small business that makes transactions with international companies, Wise (formerly known as TransferWise) could be a good option for B2B payment methods. They specialise in processing international payments without any additional fees, and allow you to open multi-currency accounts so that you can accept payments in various currencies.

Setting up your Wise account is initially free, but there are some fees involved with funds or converting to a different currency. In addition, they do not allow you to accept credit card payments, forcing you to use wire transfers instead. For businesses that carry out a large number of card transactions, Wise may not be the best choice.

What to consider when choosing a B2B payment solution

Businesses have the luxury of choice when it comes to choosing a B2B payment solution. But that’s not to say that every solution on the market is equally suited to your operation. Here are some things to keep in mind when choosing the right B2B payment solution for your business:

• What fees and charges are associated with the payment solution? How will they impact your cash flow?

• How are you charged? Are there up-front fees, do you pay a percentage of each transaction, or both?

• What safety and security assurances does the provider offer?

• Does it make the transaction as quick, easy and frictionless as possible for the customer?

For more information, read our comprehensive guide to choosing payment methods. 

Creating an online payment system that gives customers the assurance they need while enabling healthy cash flow can be a real challenge for SMEs. Fortunately, it is not a task that you need to face alone. 

We can help

GoCardless is here to provide frictionless and affordable B2B payment solutions that make life easier for you and your customers. 

From providing secure pay links via Instant Bank Pay to facilitating automated bank-to-bank transactions, GoCardless makes it easier and more affordable than ever to receive B2B payments.

Find out how GoCardless can help you with one-off or recurring payments.