Needless to say, there are all sorts of problems with different B2B payment methods, particularly ones that aren’t made electronically. Here’s the current state of the business-to-business payment space as well as some of the problems that are associated with typical payment methods. In this section, we’ll take a look at the current state of the B2B payment space (and associated problems), how COVID-19 and other factors are encouraging rapid change, and how electronic payment systems can help businesses thrive amidst the uncertainty. But those who can rise above the tension can be richly compensated, with global payment volume in the B2B space estimated at approximately $120 trillion in recent years. With accounts payable work already a sometimes-thankless chore of hitting deadlines and keeping vendors and contractors satisfied, a global pandemic and other pressures in 2020 have added a whole another layer of tension. The world of B2B payments is tough and getting tougher. The Current State of the B2B Payment Space Payments Journal found that 93 percent of small businesses were accepting Visa as of 2019.Ĭash: Cold hard cash remains a surprisingly common form of B2B payment, with 70 percent of small businesses still accepting it as of 2019, according to Payments Journal. That said, many businesses still make frequent use of plastic and are sometimes willing to accept payment by them. These payments typically happen one of three ways: Fedwire, CHIPS, and RTP.Ĭredit cards: Credit cards aren’t overly popular in the B2B payment world, since some vendors prefer to duck the 3-4 percent processing fees that credit card companies often charge. While wire transfers don’t account for a fraction of payments that checks do - with a recent Federal Reserve study noting “if only 2 percent of the current corporate check volume moved to wire, wire volume would increase 47 percent” - they still accounted for 95 million payments according to that study. Wire transfers: Wire transfers represent less than 1% of the total number of B2B payments, but make up 93% of the total amount because they are often high-value payment transactions according to Glenbrook. NACHA also projects that ACH payments will soon account for around half of all B2B payments. They’ve also become common for B2B transactions, with 93 percent of workers receiving payment through direct deposit, per a 2019 survey. Each B2B payment method has its own set of benefits compared to the next and here is how the different types of B2B payment methods differ.Ĭhecks: Despite technological advances in 2020, checks remain the most-common method of B2B payment, used for 80 percent of all business-to-business payments, according to .ĪCH payments: Automated clearing house payments or ACH payments are electronic payments and have become commonplace in recent years, with the National Automated Clearing House Association reporting that the ACH Network processed a staggering 24.7 billion payments in 2019, or more than three for every person in the world. The most common types of B2B payment methods are paper checks, ACH payments, wire transfers, credit cards, and cash.
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