B2B Payments Companies, Trends, and Landscape

Business-to-business transactions play an increasingly significant role in a global market.

In fact, the transaction value of all B2B payments is set to reach 4.2 trillion US$ in 2021, a clear sign that the industry will continue to grow.

Now, imagine processing just one percent worth (or 42 billion US$) of those payments by hand! No wonder the most significant trend in B2B payments is the automation of transactions for a seamless and quick experience. 

This article will explain the current landscape of B2B payments, the current trends, and point out a few companies that offer B2B payment solutions. 

If you still prefer to handle payments manually, this article will make you change your mind.

Jump to section:

The State of B2B Payments
Trends in B2B Payment Market
Payment Automation Benefits Case Study
Companies Offering B2B Payments Solutions
How to Set Up B2B Payments
Bonus Tips for Using Digital B2B Payments

The State of B2B Payments

The COVID-19 pandemic has shown us people are adaptable and that anyone can switch to online shopping if necessary. 

Businesses of all kinds went out of their comfort zone to offer online payments. The fear of going out of business was the push they needed. And it paid off—retailers saw a 32.4% increase in profit in 2020 compared to 2019.

Therefore, people know how to shop online. They use online payment methods which get them the desired item in a couple of clicks.

With all that said, it might come as a surprise to learn that 90% of B2B payments still happen offline in 2021. It seems that B2B (business-to-business) payments aren’t exactly moving with the times. 

90% seems like a lot (as it should) but if you consider that the global B2B market will be worth $218 trillion in 2022, it’s still a whole lot of money. 

Nevertheless, think about what payment methods you can use in your business to diversify the transactions and offer more payment options to your clients. 

If you are not sure what is available, here are the most common ones in the B2B sector:

  • cash
  • checks
  • eChecks
  • wire transfers
  • automated clearing house (ACH)
  • credit cards
  • debit cards
  • cryptocurrency
  • online payment platforms

So, why don’t businesses manage to take advantage of online B2B payments despite the evident plethora of options? 

Because the options offered are often simply lacking. For example, finance professionals claim that lack of integration with the accounting system is one of the main obstacles to using e-payments more. 

The mistake most payment processing companies make is offering the same payment options to B2B as they would for B2C (business-to-customer) transactions, which just doesn’t cut it today. 

Businesses have more complex needs than individuals do, and they want to have more choices when purchasing. 

You’re either going to give them the additional features or watch them opt for a competitor who does. We’ll cover some possible payment solutions that will attract your B2B clients later.

As the market grows, so do its needs, so make sure you’re changing with the times and offering the best alternatives for your B2B clients.

Trends in B2B Payment Market

What are the current trends in the B2B payment market?

One of the main requirements in B2B payments today is payment data visibility. Companies want transparency and a better overview of their transactions. And it makes sense. Isn’t it a lot easier to have the entire payment process in one place than chopping it up into parts, which makes it a lot harder to track? 

Virtual cards are another trend that’s here to stay. They are precisely what your buyers need—a payment method with reduced security risks, more efficient control, and extensive transactional details. 

However, virtual cards pose some challenges to businesses, the central part being all the manual work. The card number is sent via email, so the details must be entered manually to process the payment. The more virtual card payments businesses have, the slower they get. 

Fraud is a significant threat to B2B online payments with an astonishing 80% of companies in the B2B market have experienced the risk of switching from paper to digital payments. Which makes better security an ongoing challenge and trend in the virtual payments market. 

However, cash payments are always more susceptible to fraud, so going digital poses a lesser risk. Additionally, modern payment solutions today have to be compliant with security regulations, have state-of-the-art firewalls that filter possible database attacks, and other security mechanisms in place. 

With digital transactions, you can always take some steps to protect yourself and your clients, including doing additional checks, frequent reconciliations, and account blocking.

The most notable trend of all is the accounts payable (AP) and accounts receivable (AR) automation

This automation trend can bring many benefits to B2B companies because those that still track their unpaid invoices by hand are 67% slower in collecting debt than those that let technology do all the work. 

Payment Automation Benefits Case Study

All of these trends we mentioned work toward the same goal—to automate daunting and error-prone tasks in finances while providing more insight into transactions. 

Get on the payment automation trend because two-thirds of all companies are switching to automated solutions to get more out of their transactions. 

They want to spend less money on payment processing while doing it faster and improving their efficiency. And they can achieve that. 

Let’s take a closer look at Choozle, a digital advertising company. They decided to give a chance to a digital B2B payment solution to improve their financial operations and offer more payment possibilities to clients.

According to their director of finance and operations, it paid off. Choozle saw significant growth in the accounts receivable after implementing the payment solution. 

Here are some of the more important benefits they’ve experienced:

  • Payments that are more than 90 days overdue were cut in half
  • The average number of days it takes to get paid was reduced by one-third
  • They doubled the speed of creating and sending invoices
  • Closing the books took 50% less time
  • They doubled the number of invoices without needing to hire more staff

As you can see, Choozle managed to get more out of their processes. They did the job faster, got paid quicker, closed the books on their end faster, and managed it all without hiring more people, which was cost-effective.

Turning to a payment solution for help propelled Choozle into effective financing. 

Are you ready to do the same?

Companies Offering B2B Payments Solutions

Now that you know just how many benefits you can get from B2B payment solutions, it’s time to delve a bit deeper into them.

We’ll compare some of the notable players in the industry and go through the features they offer. That way, you’ll be able to determine which one suits your needs best.

Regpack

Let’s start with our own billing software, Regpack

What can Regpack do for you?

  • customizes your payment forms: you get to include any information relevant to your company and buyers for a better user experience.
  • controls your charges and payment experience: you can add service fees to the checkout, taxes, discounts, or cancel payments before they are captured. 
  • allows payments from multiple devices: you won’t be turning down clients who are using their phones and tablets.
  • supports many different payment methods: you can let your clients pay however they want, from eChecks, ACH payments, to credit cards. Multiple currencies are also supported. 
  • allows your clients to pay in monthly installments: many clients can’t afford to spend a lot at once, so this option suits them better. 
  • offers recurring billing: this automation helps you get paid on time while easing the process for your clients.
  • streamlines your email communication: this option allows you to filter and contact your users, set triggers for automated emails, send invoices, etc.

However, Regpack is much more than just your regular payment software. It can also create reports based on your payments, enabling you to use the findings to determine the revenue and where it originates. 

Through Regpack’s reports, you can easily find specific payment details. It offers a filter option that makes it easy to pinpoint and locate the exact transaction you need.

These details help you strategize better and improve your weaker spots.

On top of that, Regpack lets anyone sell products or services online due to payment forms that can be easily integrated into the website. That enables people to register and pay directly on your website. You’ll get to adapt your storefront and create a unique user experience for your clients!

Our excellent customer support together with a detailed knowledge base can help you in case you have any questions, and a dedicated project manager can help you build your customized system according to your needs.

PayPal

PayPal has been around for a while, and it can be used as a payment solution for B2B businesses. 

It allows you to:

  • offer online invoices
  • send invoices via email
  • charge clients on your website
  • expand sales through PayPal partners such as eBay, Magento, and Shopify

PayPal is recognized and used worldwide, which means you can get payments from almost anywhere. 

However, there are a couple of setbacks. 

First, the foreign exchange conversion rates are a lot higher than elsewhere, which means you will lose some money if the currency has to be exchanged. Here’s an example: 

Source: PayPal

Moreover, if PayPal finds a user “high-risk,” they will block your funds, which means that you won’t have access to your earnings for a couple of months. 

This is simply not acceptable in the B2B world, as you heavily depend on the revenue you make from your clients.

Stripe 

Stripe is another competitor in the industry due to its ease of use. It’s very similar to PayPal in what it has to offer.

The options include:

  • customized payment forms
  • integrations with many point-of-sale (POS) systems
  • payments accepted from 135 countries
  • detailed documentation for developers to get the most out of the solution
  • different payment options

Even Stripe comes with certain downsides, the biggest one being the open API—at least one person on your team needs to be a professional developer to use it. 

Source: TrustRadius

Stripe also seems to have steep fees, while having fewer payment options than PayPal (e.g. PayPal.me) 

It works for people from the accounting sphere but lacks in user experience and simplicity of use. Another threat is that there is no credit card verification, and there is not a lot of merchant support.

PaySimple

The last on the list is PaySimple, a payment solution that also offers financial reporting. 

What do they offer?

  • templates for your payment forms
  • ability to set up appointments
  • POS solutions
  • recurring billing
  • integrations for email communication
  • extensive customer support

As explained, PaySimple can be integrated with your website. However, it can’t be combined with some commerce sites, which can cause problems for companies using similar platforms.

Also, they don’t offer recurring billing, and some users find their fees and cost of service overly expensive, as the charges can rack up as the number of payments increases.

How to Set Up B2B Payments

If you’re wondering how to implement B2B payments in your company, you’re going to want to read this section.

Clearly, by now, you understand that you can’t focus solely on offline payments, even though they make the majority of B2B payments. The trends and predictions show a noticeable shift from offline to online payments as more users worldwide are starting to prefer the latter.

So, what steps do you need to take to set up your B2B payment solution?

Decide on the best payment solution for your business

Factor in all the features you’d like to have and the possibilities you’d like to give to your clients. Are you content with software that only helps you process payments, or do you want more from it?

Contact the company you chose and see how you can work with them. 

This step will include signing up for a demo on their website or directly purchasing a subscription in some cases. How do you prefer to pay? Some companies charge a tiered subscription plus a payment processing fee, while others charge per the number of users plus a payment processing fee, like Regpack.

Next, you’ll need to integrate your data into the software. 

You’ll have to transfer your customer information and business records for a seamless process and to have it all in the same place. Some companies, like Regpack, offer you the chance to work with a project manager who will adapt the software to suit your business needs for a fee.

After the setup, you have to introduce your team to the solution and help them use it. 

Your staff needs to know how to use the system, track payments, and make the most of existing features. That’s why it is useful to opt for providers that either offer training, have a database on their website, or are available for all your questions. That way, you’ll ensure that everyone is on the same page and that you can easily access information.

Finally, you’ll have to integrate the payment solution into your website. 

Some solutions can’t be integrated into your website, so you’ll have to send links to your clients. However, the best ones will allow your clients to pay you right from your website, without ever being redirected elsewhere.

Now that you know what steps you’ll need to take after you choose a billing solution for your business, let’s see what else to keep in mind for B2B payments!

Bonus Tips for Using Digital B2B Payments

There are certain things in B2B e-payments you shouldn’t forget as they could make or break your business. After all, there’s a lot of competition out there, so if you don’t ensure a smooth and seamless purchasing experience for your clients, someone else surely will.

Let’s dive into three factors you should consider when selecting and setting up your online B2B payment options. 

Offer Various Payment Options

Is your solution forcing clients to pay only in a certain way?

If the answer is yes, you’ll run into trouble sooner than later. Today’s consumers are used to having a choice, so you need to step up to the game and offer more than one purchasing option.

When a customer sees you don’t support their preferred method, chances are they will leave your website. In fact, 48% of B2B clients left a website without completing a purchase because they could use their go-to payment option. Don’t let the same happen to you!

Another benefit of providing a variety of purchasing methods is an increase in sales and revenue.

Source: versapay.com

As shown above, Weave’s study of smaller B2B businesses showed that those who provided only one option had 30% less income than those offering two or three options. And companies that offered four or more payment options for their clients, had seen 7 times more annual revenue, or a 600% increase.

Clearly, the more alternatives you provide, the higher your chance of selling the product!

Pay Attention to Security

Security should be among your top considerations, especially since fraud is a negative trend that persists in the overall digital payments market. 

It’s no secret that scammers love the internet simply because it makes it easy to con people out of their money. However, even this aspect of the Internet has advanced from the good old Nigerian prince scams to more sophisticated cyberattacks. 

Sadly, companies across the globe lost $42 billion to scams in 2020 alone, with the average being six such attacks in a year per company. 

So, how to protect yourself, your clients, and your income? 

You can start by promoting safer payment methods like virtual cards which hide payment data, automated clearing house (ACH) payments, and credit cards. You’ll significantly reduce the risk of cyberattacks by offering those options.

Most importantly, choose a safe payment provider. 

Look into the company’s history and determine how often people or companies were subjected to fraud when using the product. What did the company do to protect them? If your B2B payment solution provider doesn’t invest in security, it might be time to rethink your choice. 

With fraud becoming so prevalent in the B2B industry, it’s of utmost importance to protect yourself and your clients against it!

Opt for a Solution That Supports Online Invoicing

Online invoicing should be an integral part of your B2B payments. 

It not only speeds up the whole purchasing process for both you and the client, but it makes your job so much easier. 

How does it work? Your customer fills out the payment form, which immediately triggers an email with an invoice containing all the entered data. 

The best part about it? 

The system does all of it on its own. The clients get the invoice for their convenience, and you have the same data in your database for future reference and reporting. 

A 2020 Ardent partners survey delved into the accounts payable (AP) automation or the lack thereof in terms of invoicing.  

They found that the average cost of creating an invoice was $10.89, and it took an average of 10 days to make it. Of course, this isn’t really surprising if you know that only 31.2% of suppliers send their invoices electronically. 

Ardent partners compared the industry’s top performers with the rest of the companies in their class. 

And they realized why top performers are top performers. It was because they have automated their processes and stuck to the new solutions, which brought them mind-blowing results. 

Such companies decreased the cost of invoicing 5x; from $12.88 per invoice to only $2.56. And they cut the average number of days it takes to create an invoice by 3.7x; from 11.7 to 3.1 days.

Here are some other interesting findings:

METRIC TOP PERFORMERS OTHERS
Invoice exception rate  10.6% 27.3%
Suppliers that submit invoices electronically 54.0%  25.2%
Invoices processed “straight-through”  67.2%  21.2% 
Invoices linked to a Purchase Order (PO)  80.2% 44.3%

As you can see, a solution that streamlines online invoicing can make you a much more efficient company and help you collect more payments on time.

Conclusion

If you still prefer offline payment methods and do most of the transactions manually, you might end up being run over by others who follow the industry trends. 

The surveys show the same thing—B2B companies are automating their payment processes and reaping the benefits. 

When choosing the right payment solution for your business, think of all the features you get, from the transaction and service fees to the ease of use for you and your clients. The perfect choice should be more than just a payment provider.

After all, why not get the most out of technology, especially now that everything is moving in that direction?

About The Author
Asaf Darash
Asaf Darash
CEO and founder of Regpack

Asaf, Founder and CEO of Regpack, has extensive experience as an entrepreneur and investor. Asaf has built 3 successful companies to date, all with an exit plan or that have stayed in profitability and are still functional. Asaf specializes in product development for the web, team building and in bringing a company from concept to an actualized unit that is profitable.

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