Articles
B2B Payments Methods and The Shortcomings it Experiences!
by Account Mein Fintech Solutions We are India’s largest B2B Channel Payments PartneB2B payments exchange currency-denominated value between a buyer and a supplier for exchanging goods. Depending on the contract terms signed by the buyer and supplier, B2B payments may be one-time or ongoing. Business-to-business (B2B) transactions are more complicated than business-to-consumer (B2C) transactions because B2B payment processing takes longer to approve and settle the transaction, which could take days or weeks. In contrast, B2C payment processing typically determines the transaction immediately.
Various B2B payment processes and method types
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Paper checks, ACH payments, wire transfers, credit cards, and cash are the most popular B2B payment types. Here is how the various B2B payment methods differ, and each has its advantages.
Automated clearing house payments, or ACH payments, are electronic payments that have grown in popularity recently. A 2019 survey found that 93% of employees received direct deposit payments, demonstrating how popular they have become for B2B transactions. Additionally, ACH payments are expected to soon make up about half of all B2B payments, according to NACHA.
Wire transfers: According to Glenbrook, wire transfers account for less than one percent of all B2B payments but account for 93 percent of the total amount because they are frequently high-value payment transactions. Although they only make up a small portion of costs compared to checks, wire transfers still made up 95 million payments in a recent Federal Reserve study, which noted that if only 2% of corporate check volume were switched to wire transfers, the book would increase by 47%. Three methods are typically used to make these payments: Fedwire, CHIPS, and RTP.
Credit cards: In B2B payments, credit cards aren't ubiquitous because some vendors prefer to avoid the 3–4% processing fees that credit card companies frequently impose. Despite this, many companies occasionally accept plastic as a form of payment. According to a 2019 study by Payments Journal, 93% of small businesses accepted Visa.
Cash is still a surprisingly prevalent form of B2B payment, accepted by 70% of small businesses as of 2019, according to Payments Journal.
The Situation in the B2B Payments Sector Currently.
B2B payments are a competitive industry that is only getting tougher. An international pandemic and other pressures in 2020 have added a new layer of tension to accounts payable work, which is a sometimes thankless chore of meeting deadlines and keeping vendors and contractors happy.
In recent years, the global payment volume in the B2B space has been estimated to be around $120 trillion. However, those who can rise above the tension can be richly compensated.
This section will examine the current state of the B2B payment landscape (as well as any associated issues), how COVID-19 and other factors are promoting rapid change, and how electronic payment systems can support businesses thriving in uncertainty.
The state of business-to-business payments and some issues related to standard payment methods are currently described here.
Payment Method Problems for B2B.
Different B2B payment methods, especially those not made electronically, obviously have various issues. Providing evidence of cash payments to vendors can be challenging, as any businessperson who has filed a tax return can attest. Even though some vendors insist on it, accepting cash has many more drawbacks than just that. Processing and document reconciliation will take longer than necessary with electronic solutions, just like checks.
Although ACH payments, wire transfers, and credit cards speed up the process, businesses that promote these methods without implementing a fully-integrated, payment-neutral accounts payable automation system will likely lose money.
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About Account Mein Fintech Solutions 
We are India’s largest B2B Channel Payments Partne
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Created on Jul 27th 2023 00:42. Viewed 141 times.
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