4 Online B2B Payment Challenges and few Possible Solutions

Electronic payments are growing in the online B2B world, despite ongoing challenges. With nearly 90 percent of B2B companies anticipating the demise of the paper check in favour of faster, more advanced online payments through online payment gateway, over six trillion dollars may soon be transferred electronically between buyers and suppliers worldwide. It should come as no surprise, then, that a slew of services have sprung up promising to make online B2B payment methods faster, simpler, and more secure.

Aside from simply persuading businesses to break old habits and begin transferring their payment and invoicing systems to an electronic format, these services face a slew of challenges. While modern commerce requires increasing levels of flexibility and responsiveness, the aggressive expansion and distribution of supply chains has made it more difficult to complete transactions on time. To be successful, an online payment gateway must first address some of today's most difficult B2B e-payment challenges:

1. Handling multiple B2B payment options, including checks

The best e-commerce portals will make payment as simple for their customers as possible. While standard credit cards and ACH payments are expected, a good online payment service should also be able to accommodate corporate and purchasing cards (or P-Cards), as well as their associated needs.

P-Cards are becoming increasingly important in online B2B transactions, especially as more businesses abandon paper. However, because business-to-business purchases are typically larger and more frequent than consumer credit card purchases, businesses are also looking for ways to qualify for the lowest possible Interchange rate, or the fee card-issuers charge to process a transaction. To do so, the buyer must be able to enter detailed information about their purchase, such as product codes, descriptions, and tax amounts, in order to meet Level 3 Interchange requirements, which provide the best possible rates.

Online payment services must, of course, be able to accept other B2B payment methods, such as paper checks. Although they are used by fewer businesses than ever before (as previously documented), they remain essential in the B2B world. Furthermore, certain industries, such as medical and legal, continue to prefer checks to other forms of payment.

2. Credit lines and discounts

Credit and volume-level pricing, among other discounts, have become standard for B2B sellers, and these expectations have carried over into their e-commerce stores. As a result, unlike their B2C counterparts, online B2B payment services cannot require customers to simply enter their payment information when they are finished shopping. Instead, it should be capable of saving order information and only sending out invoices when necessary, even if that is several months later.

In addition to this functionality, the best online payment gateway service must be able to automatically track payments, send out reminders, check customer credit, and, in some cases, apply discounts to customer orders retroactively. All of this will provide the B2B customer with the familiar experience they are accustomed to, as well as the speed and convenience of an online store.

3. Purchasing approval

It is also common in B2B transactions for multiple buyers to be involved in an order. As an example, one employee may be in charge of placing the order, but that information must then be sent to another employee who has the authority to pay. In more complex arrangements, a seller may be required to accept orders from multiple departments within a single company, each of which uses a different method of payment. Both of these scenarios can easily delay the payment process and, in the worst-case scenario, result in cart abandonment.

To avoid this, a successful online payment system should be able to track and save orders while also allowing customers to securely send them across departments for payment approval.

4. Security

Finally, when it comes to online payments, data security is still a major concern. It is critical that payment systems remain safe and secure, especially in B2B e-commerce, where transactions occur frequently and any breaches could result in the loss of sensitive data from both the buyer and seller. They can accomplish this by implementing a tokenization solution, in which sensitive payment data is encrypted and replaced with a token before being stored in a database safe and separate from the online store. Tokenization has the added benefit of allowing customers to order with a single click rather than having to enter their payment information each time.