B2B Ecommerce Payments: Flexibility & Convivence Now More Than Ever

B2B ecommerce refers to purchases made in part or wholly online between two businesses. These transactions are generally, but not always, carried out via an online gateway, such as a website, an online marketplace, an electronic data interchange (EDI) system, or another electronic method. These purchases can range from a Rs 200 basket of groceries to a major capital expenditure.  

The manner in which these transactions take place is rapidly evolving. Credit and debit card usage, as well as bank transfers, which were once the go-to methods for ecommerce purchases, are gradually declining, thanks in part to the rise of modern, digital alternatives such as mobile wallets.   

The business-to-business ecommerce industry is rapidly growing and evolving. That’s just one of the reasons why knowing what works – and what doesn’t – in B2B ecommerce payments is critical to a merchant’s success.  

Types of B2B Ecommerce Payments 

Traditional trade credit involves a company offering credit terms to its buyers, often managed by a third party.  

Purchase orders (POs) are a prevalent method of payment in B2B transactions. A PO is an official document issued by a buyer to remunerate a supplier for products or services.  

Paper checks entail a physical check sent to the seller, who endorses and deposits it at a bank. Mobile banking apps also facilitate electronic check deposits.  

Cash on delivery is a historical option where the seller pays in cash when the order is delivered.  

Credit card payments involve the buyer charging the order and determining how/when to repay their financial institution.  

Digital payment platforms, like PayPal and Venmo, allow buyers to store their bank account or credit card information for convenient payment during orders.  

Bank-to-bank wire transfers, including ACH (Automated Clearing House) and EFT (electronic fund transfer), are gaining popularity. ACH processes transactions in batches, while EFT electronically transfers funds between accounts.  

Common B2B Ecommerce Payments Challenges  

We live in a modern era in which technologies and industries can change overnight. 

Let’s take a look at why some of the most prevalent traditional payment methods are failing buyers in the digital age, hindering B2B companies from reaching their full growth potential.  

Traditional transactions are expensive. 

Purchase orders (PO) are one of the oldest and most extensively used methods of conducting a business-to-business transaction. This appears to be the simplest approach to conduct transactions at first glance. The buyer locates the desired products, places a purchase order, and awaits delivery. The supplier fulfils the PO, ships the goods, and issues an invoice.  

The seller then waits to be paid — and then waits some more. 

Without an update, the seller’s cash flow will be significantly disrupted, potentially resulting in an inability to make further capital investments, delayed purchases, and lengthy delivery timelines.  

Using trade credit complicates purchasing. 

With all of these complex variables causing friction throughout the B2B purchasing process, it’s almost unbelievable that many B2B and wholesale merchants continue to force customers to use obsolete payment methods, notably trade credit.  

Accepting trade credit as a method of payment necessitates a significant investment on the seller’s part. This usually involves someone in their accounting department who is solely responsible for managing the trade credit process, from accepting and analysing applications to collaborating with a third-party financial institution to approving applications and following up on unpaid debts.  

Most B2B sellers have razor-thin profit margins, and every minute spent collecting cash from a customer goes into that margin. 

Credit cards are among the most widely accepted internet payment methods. While credit cards are convenient, there are several reasons why using them as a replacement to other traditional payment methods is less than ideal.  

Purchasing pricey goods or services might be challenging. Even if a company has a credit card with that much accessible credit, the interest rates are frequently exorbitant.  

There is also an added danger for the merchant. What happens if a buyer files a chargeback after the product has been delivered? The merchant is out of both revenue and product in that circumstance.  

The Benefits of B2B Payments Going Digital 

For more than a decade, digital payment mechanisms have been used predominantly in B2C businesses. However, there are a number of advantages for B2B enterprises to become digital, including:  

Instant B2B Payments reduce complexity. 

Implementing B2B payment technology solutions can reduce transaction friction, costs, and risk significantly.  

Flexible payment solutions connect straight into the checkout process, streamlining the entire experience, using advanced algorithms. Instead than requiring the buyer to download and complete a multi-page form, as many trade credit applications do, a few simple questions can determine a buyer’s creditworthiness.  

The system then determines how much credit the buyer has access to and the payment terms using real-time automation. Buyers can acquire credit approval in seconds where such integrations exist.  

Sellers can drastically minimise the friction inherent in a B2B purchase while boosting the number of buyers who complete purchases by incorporating a high-speed system to check and approve credit lines.  

Better data equals higher revenues. 

Payment technology solutions provide sellers with significantly more and higher-quality data than traditional trade credit or even credit cards. This can be used to remarket items and services to current consumers. 

They can, for example, segment their customer base based on the amount of credit each customer has and create segment-specific ads.  

A merchant may provide offers on lower-cost items that the buyer may need on a frequent basis to consumers who have a limited credit line. Customers who utilise their credit line to make higher-cost capital investment purchases can use it to attract the buyer with complementing products and even services, such as maintenance packages or service agreements. 

In other words, this line of credit does not need to be utilised exclusively for goods purchases; it can be used to draw in buyers to spend more.  

What to Consider When Choosing B2B Ecommerce Payment Methods  

As with anything related to ecommerce, it’s a good idea to weigh all of your possibilities before settling on one. What you sell, your business strategy, and your cash flow all have significant implications that should shape your thinking.  

Product offerings. 

Are you selling a tangible item, a service, or a combination of the two? 

This is an essential question because most purchasers are used to paying for things in advance because it is the standard method of payment in B2C transactions. 

B2B buyers, on the other hand, may be more hesitant to pay for services entirely ahead since they want a result from obtaining those services before paying. However, it is typical for service businesses to seek a deposit before doing any services. 

Fortunately, there are various payment methods available to assist many different sorts of organisations.  

Many platforms provide versatile B2B payment processing alternatives for every type of business, whether it is B2B, B2C, B2B2C, or works in wholesale.  

Customer credit management. 

Internally managed trade credit programmes need merchants to dedicate resources to collecting and processing applications, delivering bills, and following up on late payments. These activities are frequently labour-intensive and necessitate a large investment in human resources.  

Furthermore, offering trade credit might put a strain on a company’s cash flow. Orders must be fulfilled before money is received, which means the merchant must cover all fulfilment expenses, including purchasing raw materials or the product, picking, packing, and shipping, and dealing with any customer support concerns.  

Most of these issues are alleviated by providing a flexible payment option. The merchant does not have to spend resources to handling the trade credit procedure and receives payment within 48 hours, freeing up much-needed cash flow and offering additional chances for capital expenditures and speedier growth.  

Buyer relationships. 

Do you have long-standing ties with these customers, or are they new? 

When working with buyers with whom they have a long-standing relationship, merchants are frequently more easygoing regarding payments. However, providing that flexibility to new consumers is more difficult.  

Offering alternative payment options shines in this area as well. Because the solution provider carries the risk of providing credit, businesses may offer various payment alternatives to existing and new consumers — without fear of new purchasers taking advantage of them.  

If you’re wondering whether offering flexible payment options to your clients is worthwhile, consider B2C ecommerce. For more than a decade, this technology has been used in B2C situations and has become one of the most popular payment methods for online purchases.  

Flexible payments are expected to give B2B ecommerce enterprises an advantage over those that do not. Firms require every advantage they can get in today’s post-pandemic, digital economic landscape.  

Wholesalers and distributors can provide a more user-friendly consumer experience by making online transactions more flexible – with less friction, lower costs, and lower risk. Finally, this will have a huge impact on how customers see you, shop with you, and perceive your brand.  

Flexible payment solutions are the future of ecommerce, and those who embrace the future will be successful in the long run. 

Rolloverstock stands as a pioneering force in facilitating B2B transactions by offering a diverse range of payment methods. Recognizing the varied preferences and requirements of businesses, Rolloverstock ensures a seamless and inclusive experience for buyers and sellers alike. From traditional methods to modern digital transactions, the platform’s commitment to versatility enhances the ease and efficiency of conducting business on its platform. Rolloverstock’s dedication to innovation and customer-centricity makes it a trusted partner in navigating the dynamic landscape of B2B commerce.