How digital B2B payments are accelerating the speed of business

Digitized and automated business-to-business (B2B) payments are forecast to reach $1.61 trillion in global market value by 2028.

From traditional paper checks to automated payment systems, B2B payment options are plentiful. But while businesses are experiencing greater payment flexibility and security, the industry is still evolving and discovering the challenges of B2B payment processes.

Popular B2B payment types

While checks are still the standard B2B payment method for many companies, digital B2B payments are on the rise. A 2020 Gartner report predicted 80% of B2B payments would be digital by 2025. 

• Checks — Checks provide an audit trail that simplifies inventory management. But high processing costs, diminishing security and payment delays can add up for some organizations.
• Automated Clearing House (ACH) and wire payments — With ACH payments, businesses can send electronic payments among any banks in the United States. In most cases, there’s no charge. Wire transfers come with higher fees but are better suited for time-sensitive and high-value cross-border payments.
• Credit cards — Credit cards can be cheap and convenient, and businesses can easily monitor transactions with monthly statements. Visa B2B Connect specifically focuses on cross-border B2B transfers through blockchain technology for fast, transparent and secure payments.

Virtual credit cards are an increasingly popular payment method. They link to a credit card account and use one-time passcodes that mitigate fraud. 

• Digital payment platforms — Digital payment platforms such as PayPal, Apple Pay and Stripe enable electronic transfers. Different payment platforms offer various perks, including analytics, online invoicing, fraud prevention, risk management and B2B cross-border payment networks.

Real-time payments rising as the trend to watch

Real-time payment (RTP) solutions enable businesses to send money through their financial institutions for recipients to receive instantly. RTPs can accelerate cash flow and liquidity, and improve operational efficiency and flexibility.

RTPs can open the door for new business models, services and applications, which could further shift the B2B payments industry from paper to digital.

The RTP trend is getting a boost in the United States with the Federal Reserve’s FedNow℠ Service, which has the potential to usher in a new U.S. payments era.

Onboarding is crucial for secure B2B payments 

While there are many innovations and opportunities in B2B payments, fraud is still a top concern. A 2022 business survey found 64% of respondents reported at least one serious B2B fraud attempt in the previous year.

Security concerns underscore the importance of effective onboarding. Strong onboarding processes ensure proper compliance and fraud prevention steps are in place. By verifying a business and adding security measures at onboarding, an organization gains greater visibility and control over its entire payment system. Those preventative measures can lead to fewer challenges down the road.

B2B payments will evolve as digitization becomes the industry standard

From industry giants to new startups, digital B2B payments are ripe for innovation. For suppliers, they promise quicker payments and less hassle. For buyers, they provide simplified transactions.