Top B2B Digital Payment
Solutions for Your Business
Everything you need to know about B2B digital payments for your business
Updated November 1, 2020
Figuring out the kind of payment system your company should use for B2B transactions isn’t necessarily simple. Lots of methods of transferring money and processing payments exist, so it is often frustrating when a business is trying to determine which one to use. No matter if your business handles a large amount of seller or contractor payments or if it is a chiefly an online business, managing its assets properly is extremely important.
First, when figuring out the kin of payment method you should use, you must know which kinds are available. The top B2B payment solution for your company needs to be the one that’s easiest for your customers, as well as maintains the lowest costs, and makes sure you are using the one that is the most safe and secure kind of B2B payment choice.
What are the top B2B digital payment solutions?
Here are a few B2B payment choices so you can decide which of them is the top one for your company:
If you want a very safe method of transferring funds, ACH payments are probably the best decision for your company. Prior to learning all about how to use ACH payment processing, it’s vital first to understand the meaning of “ACH” and how it operates.
What are ACH payments?
Automated Clearing House network (ACH) is an example of the biggest system for making payments in the US, and they process huge numbers of debit, as well as credit transactions. ACH payments processing denotes any transfer of funds between financial institutions which processes via the Automated Cleaning House network. Funds get sent right from a payee’s bank account, and this many times makes the fees less and it transfers quicker.
Kinds of ACH payment transactions
There are 2 chief types of ACH transactions: Direct Deposits, normally for payroll transactions and Direct Payment, which is transferring funds to pay a creditor. Inside these two transactions are 2 different payment types: ACH Credit and ACH Debit.
Both of these necessitate the payee authorizing a transaction to move or send funds between two accounts. ACH Debit transactions use funds from a financial account to pay a bill, i.e. for a recurring payment or an automatic bill setup. ACH Credit transactions send funds from one bank account to a different financial account, which lets people transfer funds in between several financial accounts. ACH payments processing lets people send automatic payments as well as transfer funds fast between accounts.
Is Making ACH payments safe?
When transferring funds, it’s vital to understand if the payment methods are secure and safe. Therefore, ACH payments processing has the advantage, states NACHA, the Electronic Payments Association and trustee of ACH’s Network. They report it’s one of the best and most safe and trustworthy payment methods in the world. Every payment made via the ACH Network is protected by federal law in cases of any fraud or mistakes.
What does it cost to use ACH transactions?
A lot of transfer methods are expensive, however, the cost for ACH transfers is usually not as much as other payment methods. Still, these processing payments are done via your financial account provider’s rules, and ACH evades service fees imposed by card networks through the use of financial account and routing data directly. A few providers might add fees or other costs to a funds transfer, which range between one and three dollars a transaction. You should check with your financial institution to find out their policy so you can avoid incurring any unexpected costs or a possible processing delay.
How long do ACH transfers take?
ACH transfer distribution sometimes takes a few days, although the National Automated Clearing House Association recently said same-day transaction processing was supposed to be available by now. There is a fee for same day services, but it lets you transfer money quicker between companies and when processing payroll for your employees. Otherwise, it takes about two business days to process ACH payments via the majority of banks.
Distinct advantages exist when you use ACH transfers for your main type of payment. ACH transfers are verified, secured by trustworthy financial institutions, are less costly, and lots of online sellers use them.
Haste is many times vital when you are deciding on a type of payment. Wire transfers are the most secure and trustworthy for instant transactions. They are used to transfer funds from one entity to another via financial accounts or via a cash transfer through a 3rd party service or vendor. They are especially good for when you need to transfer funds to someone or a company overseas since the funds are immediately available and you don’t have to have a financial account.
Wire transfers from banks necessitate precise data on the account the funds are sent to. If you want to transfer funds without using a financial institute, you can use a nonbank type of wire transfer that lets the person on the other end get their funds through a cash office.
How long do wire transfers take?
The chief advantage to using a wire transfer is the money can be accessed nearly instantly. You can do a same day transfer, but normal processing takes one or two business days.
Wire transfers that don’t go through a bank, particularly if they are going overseas, may take several days dependent on who provides the service and where it is going to. The additional advantage is it lets someone avoid paying bank fee add-ons that are sometimes put on one side of the transfer or both.
How much do wire transfers cost?
Wire transfers are trustworthy and quick; however, they are expensive and cost money on both sides of the transfer. Dependent on if money is sent in the US or overseas, it could cost you to both send and receive funds. Average transfer fees listed by Nerd wallet for domestic and international transfers ranged between nine and twenty-five bucks domestic, and between ten and forty-four bucks for overseas transfers.
Is it safe to send or get money via a wire transfer?
Wire transfers are typically thought of as secure and trustworthy. Wire transfers via a bank necessitate both sides to have a financial account. This lessens the chance of it being a scam. The funds get sent instantly, so the receiver doesn’t need to be concerned about if the check will bounce or if their payment will get delayed. Financial institutions find wire transfer mistakes like if there isn’t enough money in an account or if the account number is wrong, prior to transferring the money, therefore, there’s not much of a risk of letting someone pay via a wire transfer.
One con of using wire transfers is you can’t get the money back after you send it, as a wire transfer can’t be stopped. So, it’s vital to understand how wire transfers work and how to properly use them and make sure the receiver’s data is correct. A group called The Balance gives expert advice on finances, including a comprehensive guide about bank wire transfers which totally spells out how to use wire transfers.
When it comes to quickness and trustworthiness, a payment sent via a wire transfer is great for doing payments between businesses. But, it is costly and at times risky. So, you must pay vital attention to the receiver’s bank info when you send a payment because you can’t stop it once it is sent.
Electronic Funds Transfer, or EFT, is when funds are transferred electronically between financial institutes. It is also known as direct deposit, electronic banking or a bank wire transfer, etc. Sometimes it is a bit confusing to understand if there are differences between these kinds of payments.
EFT is an extremely wide-ranging term that describes any kind of electronic funds transfer not started directly by a financial institute. This can include direct deposits, bills you pay automatically, or a withdrawal from an ATM machine. Other uses are to process payroll, or pay recurring membership fees, which the payee usually initiates and then it’s automatically sent without any direct involvement of a bank.
A lot of businesses depend on EFT to do direct deposit of employee paychecks into their employee’s bank accounts. Plus, a lot of folks use it for paying their bills. Many different kinds of service can be done via EFT, which actually involves any kind of online transaction or any existing type of funds transfer.
Why is EFT used?
EFT payments are safer than a credit card payment or a paper check because recurrent payments into a financial account necessitates verifying that account. Paper checks, for example, could get stolen or lost in the mail, plus EFT is better for the environment.
EFT lets financial institutes use digital banking systems instead of paper ones, instead of paper ones, as digital systems are more effective, dependable, and safe. EFT makes it easy to transfer funds, which leads to an improved marketplace for companies that sell goods, services, etc. on the Internet. On the hand, B2B payments, merchants or customers can make a payment via electronic means, which sends the payment info to the business by electronic means. Processing an electronic payment via electronic bills is many times simpler for the accounts payable dept, as it lets them track the digital info quickly, as well as speedily update records of audits, and confirm payment data.
EFT is sometimes used interchangeably with an ACH transfer, as defined by an article in Forte’s on payment basics. Both types of funds transfers send monies from one financial institute to another. Some transactions said to be EFT transfers include payments for credit cards, any payments set automatically, or a direct deposit transfer of funds. Knowing all that will aid you in the future if you see EFT listed concerning forms of payment online.
You probably heard the word eCheck or may have had a creditor ask you to provide an electronic check payment. The majority of Internet stores let you pay via electronic check and a lot of them prefer it. Consequently what precisely is an eCheck? How does it differ from other kinds of digital payments? processing?
Explaining electronic checks
Basically, an electronic check is a digital form of a paper check which transfers funds straight from a person’s checking account to a different person’s checking account. It is seen as a form of EFT which depends on precise rules which were put in place by regular checking system policies. It’s safe to use them, and it’s the sole kind of e-payment that the US Treasury backs up.
How do electronic check payments work?
eChecks use banking account data from the payee and use that it to transfer funds to a different bank account. It acts like the procedure for processing paper checks, however, it’s much more precise. Funds from one account get transferred to another via a verified and safe ACH network, which then get put into the receiver’s account.
You can choose to electronically send money via eChecks by manually using data from a paper check or by taking a picture of the check and sending it digitally to your bank account. This payment method is quicker for paying bills and the check clears instantly.
Providing eCheck payments is thought to be a service banks offer to merchants so their customer can speedily process, make payments, or get payments from a checking account. Additional commercial services consist of online processing of credit or debit cards, as well as a wire transfer, ePayables, or additional kinds of ACH payments.
Why should you use or take eChecks?
You may wonder why a company should take digital check payments or payments by eCheck. The advantage of electronic check payments is someone can collect and keep the same kind of info gotten from a payment done with a paper check. Business transactions include info on the payee, their bank account and routing number, as well as past data from monetary records.
With an echeck payment, you get the equal security of traditional kinds of banking procedures along with the extra convenience of an electronic transfer of monies. You can select to halt payment processing or resolve arguments straight through the bank, and that gets rid of the problems related to doing it via a different online service.
If we discussing advantages of precise B2B payments, it is vital to view quickness, along with safety. As with the majority of online transactions, eChecks get processed much quicker than paper checks, as the bank data is verified electronically and there’s no need to manually review a paper check. So, a lot of sellers decide to send out an invoice via electronic billing as it gets rid of a reason to use paper checks or paper auditing records.
Echeck payments permit someone to safely and speedily process a transaction that goes to or from your company. It can aid in keeping financial records up to date, letting customers pay quickly, and allowing businesses to run more efficiently.
Credit cards are what many people prefer to use these days and more people use it than use cash. People can buy things that cost more money than they usually could afford and they are perfect for emergency large expenses. Plus credit cards have other benefits like special deals, earning points and helping to establish a credit history.
However, they can be inconvenient for a business due to them having to pay high fees for transactions. Actually, these high transaction fees what a lot of businesses hate the most about them. Plus they can limit cash flow, as well as be a source of possible security risk that clients and companies may suffer if their card is lost or stolen.
Virtual cards are getting very popular as an improved B2B payment solution. Its name reveals the main benefit, as it’s a card only existing digitally. These cards are linked to real card numbers as well as real financial accounts. However, companies get more control on the way they are used, as well as can invoke limits, and keep other payment information instead of using additional kinds of e-payments. Let’s start by showing you what these cared are and the way they operate.
What is a virtual card and how does it work?
Virtual cards aren’t really cards. They have numbers from a real card, but that number is not the same as the real one. The cards are produced for business payment reasons and frequently expire inside of a precise timeframe. The cards contain payment limits set by the business, which prevents a vendor, supplier, or employee from going over a precise amount. You can use them just like other kinds of payments, although they are mostly used to make business transactions online.
The 3 most frequently used virtual cards are sole-use cards dispensed for one-time payments such as a gift card; authorization-only virtual cards connected to a business card account; or a lodge card, which are given to vendors with a precise limit and used to pay invoices issued for products or services.
Virtual cards are comparable to ePayables procedures as both can replace paper checks with funds processing via info from a credit card, although virtual cards have stricter restrictions and controls than ePayables.
Why should you use virtual cards?
It might seem virtual cards are needless for a B2B transaction if the vendor is trusted. But, setting a credit limits is frequently essential for tracking finances as well as to keep control on outbound monies, even those going to at trusted business. For those reasons, it has become more common for companies to employ virtual cards for the majority of or all the transactions. Major card business Visa is seeing this movement and so it recently created a partnership with one of the virtual card businesses to get additional business.
When you use a virtual card it gets rid of any risks from using real credit or debit cards, principally for doing electronic payment processing. Businesses don’t have to give account data for vendor’s invoices or any additional kinds of sensitive monetary data by using virtual cards.
Purchasing cards, sometimes called P-cards, are company credit cards provided to workers for making a business purchase. Companies can set strict limits on these cards, like a limit on spending or a business location limit. P-cards can be created which are only allowed to be used for a single vendor or kind of service, and you can block some types of buys.
P-card statements, unlike other kinds of credit card statements, contain a large amount of details, like a description what was bought, how much it cost, how much taxes were paid, and where the payment was made. This info helps AP departments rapidly process monetary data and electronically settle payments with no need to do more paperwork. This aids in streamlining the AP process and maintains perfect monetary records.
Why use P-cards?
The major benefit to P-cards for businesses is the quantity of control there is over business expenditures. It is simple to manage your money as long as you know precisely the amount of money coming in and leaving. Another advantage of P-cards is they get rid of a worker having to create and process a purchase order, so goods and services get delivered quicker. Less paperwork is great at all times, because your business saves money and time, along with avoiding financially damaging errors if paperwork is lost or incorrect.
For sellers, paying with P-cards guarantees the get paid because it’s a kind of credit and so it gets processed immediately. Then sellers get paid fast and don’t have to send out an invoice or process paperwork. It works great for everyone involved and the whole system of completing a business purchase is much simpler.
A lot of B2B businesses are accepting this new blockchain technology to get quicker, less costly, securer and more transparent transactions in their business.
What is cryptocurrency?
Cryptocurrency is a digital for of a peer to peer currency allowing for transparent and immediate transactions which are based on a apparently unhackable cryptographic coding. There isn’t a physical complement like there is with paper currency, and it is nonexistent except in the online world. Cryptocurrencies don’t have any fundamental value as silver or gold does.. The stock of cryptocurrency is also not operated or run by a central bank, or any kind of financial institution, or even the government. By using cryptocurrency, companies worldwide can make a transaction and not need to use legacy types of banking systems which many times cause payment delays, and cause problems for both buyers and sellers dealing with overseas purchases.
Is cryptocurrency a secure type of payment?
Another main advantage of cryptocurrencies being used for electronic payments is it protects the user from being scammed. Crypto payments are safe and cannot be reversed. Plus every transaction gets recorded on the blockchain and the money is locked up inside a public key cryptography system. Likewise, the method for payments is done via a decentralized blockchain so it gives them an almost impossible encryption level.
What Does a Cryptocurrency Transaction Cost?
Common cryptocurrency payment networks such as Bitpay and Coinpayments cost between half and one percent for each transaction. Usually, a having a cryptocurrency account in a digital wallet format is completely no cost. Unless someone wants to invest in some kind of cryptocurrency hardware wallet or a type of prepaid card, it is totally free to use crypto type payments except for the required transaction fee.
Paper checks are actually still used in many companies, and the National Automated Clearing House Association estimates about 46% of check usage today is from small business transactions.
One reason is due to the fact checks are low cost and even though a company has to buy printed checks, as well as pay for postage when they mail them out, they are free to process unless you end up with a bounced check.
A main disadvantages to taking checks as a form of payment is there is a float time for getting paid. It can sometime take up to a week for the funds connected to a check to clear so the business gets paid. But, with more modern systems these days, that float time has been reduced in some cases to between 1 and 3 business days.
A few clients and companies still deal in checks when they buy things and pay their bills. They are normally sent through the mail and don’t cost much for either the business or the customer to use. Plus, there aren’t many worries about cash flow when using checks.
However, a lot of people and companies don’t use checks anymore as they are sometimes risky to accept. Part of that problem is the aforementioned waiting time to get the funds to clear. But since that has been reduced in most cases to less than three days, it has made it easier for a business to use checks if they so desire to keep taking them for payments.
Still, check usage is not always convenient for clients, and less of them write checks for payments ad prefer to use electronic forms of B2B payments.
Cash is very simple to use and a lot of businesses still consider it “king.” It is easy to accept, and simple to record a payment, and it is great for easy cash flow. Plus if they keep it on hand, cash is convenient for a company to use to quickly pay its bills, have less transaction fees, plus it is great for emergencies. Plus there are no worries about expensive transaction fees.
However, many clients don’t like using in anymore and prefer credit, debit, ACH or PayPal for purchases and bill paying. Less and less people even keep any cash on hand and a lot of people consider it inconvenient to use.