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The Key Features of B2B Payment System

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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 editedNov 20212 min read

A B2B payment system is an automated system which facilitates payments between businesses in the same way that customers have been able to pay using a range of different methods for a while now. The evolution of B2B payment systems has been somewhat slower than in the consumer space, where the idea of paying for goods using a paper cheque, for example, is now all but defunct. Electronic payments have almost completely supplanted other methods for consumers, and now the same process is taking place in the world of B2B payments. This guide will detail what merchants need to look for in B2B systems and how B2B payment solutions operate.

How do B2B payment systems work?

It needs to be understood that B2B payments are those made between two companies. The fact that payments of this kind often feature more complex processes than those between people (P2P) or between your business and a customer (B2C) means that they differ in some respects from the payment solutions which you – as a merchant – may already be used to working with.

Unlike most of the payments which a merchant is used to dealing with, B2B payments still sometimes take the form of paper cheques, but the most forward-thinking merchants are those which are already working to adopt digital payment solutions. Automated methods which allow merchants to receive, issue and process payments can make a huge difference to the cash flow generated by the business, and therefore to the net profit levels being achieved.

Some of the B2B payment solutions on offer

Credit cards

Many merchants make use of credit cards to facilitate B2B payments. They offer a quick, simple and cost-effective means of facilitating transactions and freeing up cash flow. The fact that the credit card in question will issue a monthly statement – either online or in paper – makes it simpler for the merchant in question to track the payments they’ve been making.

It should be noted that treating the credit card being used like a debit card, and paying the balance in full at the end of every month, will ensure that the payments remain interest free.

ACH payments

ACH payments are Automated Clearing House payments. They are faster and more efficient than methods which rely on hard copies of documents, because they utilise digital means to transfer the money from one business to another. All that is needed to facilitate payments of this kind is a routing number and the details of each of the bank accounts. As with credit card payments, ACH payments are simpler to track because they are subject to month-end statements. If a merchant utilises an Enterprise Resource Planning system (ERP) and other business software applications, the ACH payments can be integrated with the other software.

Digital payment platforms

The B2B payment system you make use of could also be based on a payment platform such as one of the following:

PayPal

Venmo

Google Pay

Dwolla

Skrill.

B2B payment systems of this kind tend to operate through either a mobile app or, in the case of PayPal, through a laptop or PC. One issue to bear in mind is that some online payment systems of this kind incur charges for transfers which are higher than those which apply to other methods.

Trends within B2B payment solutions include real-time processing of payments, mobile payment methods and peer-to-peer payments.

We can help

If you’re interested in finding out more about B2B payment systems, then get in touch with our financial experts. Discover how GoCardless can help you with ad hoc payments or recurring payments.