B2B Payment Systems 101: All the Basics You Need to Know

B2B payment systems are a critical component of every successful enterprise. But while some platforms empower businesses to perform their best, others become an obstacle to healthy growth.

More than 27% of businesses lose 10% of their monthly revenue to inefficient payment processes. This problem only gets worse as payment sizes and complexity increase, with half of all finance professionals spending 10 hours per month managing B2B transactions.

It’s clear that sending and receiving B2B payments becomes more complicated as a business grows. However, operational inefficiencies are not an inevitability — instead, they are symptoms of an ineffective payment platform. Moving to a new platform may increase your profits and provide additional opportunities to scale in the future.

In this post, we’ll explore the importance of a B2B payment system for modern brands, discussing exactly what they are, what they should offer, and how they can help your business thrive.

What is a B2B payment system?

B2B payment systems are digital platforms designed to facilitate the transfer of value between two or more businesses. This could occur through a direct deposit, digital wallets, or more commonly, a check. In 2022, around 40% of all B2B transactions were made through physical checks.

You do not need to own a B2B business to make B2B card payments. In fact, even B2C and DTC companies sometimes send money to other brands and businesses.

Here are some reasons why your company may need to make B2B payments:

• Paying suppliers or wholesalers. Your e-commerce business may purchase goods and services from another business, requiring you to make digital payouts in exchange for their efforts.
• Paying contractors or freelancers. Contract professionals aren’t employees and don’t count as part of payroll, which means you need to send direct payments from your business to theirs.
• Paying for transportation or logistics. If you sell physical products in retail outlets or grocery stores, you may need to pay a 3PL or supply chain intermediary to transport goods.

How are B2B payments different from other payments?

B2B payments are subject to far more complexity than other types of payout solutions. Not only are their average invoice values typically much higher, but the number of decision-makers and heightened legal expectations require more effort than the average payment.

For example:

• It takes an average of 14 days to process a B2B payment. Your business may need to wait for several weeks before seeing payments clear, which is only worsened by slow payment systems that put holds on incoming funds.
• Speaking of stakeholders, the average B2B payment requires a minimum of two and five individual sign-offs. The average payments platform wasn’t built for such intricacies and may struggle to keep decision-makers informed.
• Today, 63% of B2B businesses report doing cross-border business with other brands. This requires international payment processing, foreign exchange (forex), value-added tax (VAT), and adherence to certain legal ramifications — little of which is possible with an outdated payments platform.

Unless you have a B2B payment system with the right features and tools, it can be difficult — if not impossible — to manage rapidly changing expectations.

What are the advantages of a good B2B payment system?

1. Create a faster payment process

Business owners need incredible flexibility and agility to survive in today’s economy. Slow, clunky, or outdated payment systems should be replaced by lightning-fast transfer methods, preferably through an API.

2. Save more on management costs.

Traditional payment systems may cost much more than advertised, thanks to hidden fees, costs, and rates. Switching to a fee-free platform that only bills for what you use could save thousands in unnecessary setup costs.

3. Simplify the payment process.

Some businesses struggle with confusing payment systems that come alongside steep learning curves. Thankfully, the best B2B payment platforms offer comprehensive documentation and an intuitive interface anyone can learn.

Let’s take a closer look at how your business could get each of these advantages with the right B2B payment system.

How can you choose the right features for your B2B payment system?

Around 92% of finance professionals believe switching to a better B2B payment process could increase their company’s overall earnings per share (EPS).

However, not all B2B payment systems are created equal. It’s important to know what to look for before migrating your payment process or committing to a long-term contract.

Here’s everything you need to know about the key features of a B2B payment platform, starting with the most important characteristic.

1. Support multiple B2B payment methods

The B2B payment platform you choose should offer multiple ways to send payouts to businesses. You should never feel locked into a particular payment method or feel forced to use one system over another.

The best B2B payment platforms provide support for multiple payment methodologies, including the recipient preferences of both today and tomorrow. This includes:

• ACH transfers
• Credit and debit cards
• Cryptocurrency (BTC, ETH, Stablecoin, etc.)
• Digital wallets
• Checks
• Prepaid cards
• Wire transfers
• Gift cards

There should also be ways for recipients to pick customized types of digital value. In addition to cash payouts, for example, recipients could choose to receive payment via prepaid card, cash, or cryptocurrency.

2. Connect your existing tech stack (API)

Not every payment platform offers the flexibility to integrate with your existing tech stack. Some provide limited solutions with pre-established partners, which may force you to switch from one tool to another. Others only provide out-of-the-box options, forcing you to create a solution that suits some, but not all, situations.

It’s critical to choose a B2B payment system that comes with an accessible API. Not only can this reduce friction between your existing systems, but it also ensures your business has plenty of room to scale as different needs arise.

Leading brands have used Runa’s API to:

• Build open-value digital rewards (Sodexo)
• Create global incentive programs (Tradedoubler)
• Accelerate eGift delivery (Vodafone)

3. Automate your B2B payment workflows

Automation is key for modern B2B payments. In fact, implementing an automated process for your accounts payable (AP) system could save you 70 to 80% more time compared with manual methods.

There are a number of ways your B2B payments platform can assist with payment automation. For example, you should be able to tap into an API and create a bespoke solution for your current tech stack. You should also have access to features like mass payouts that can send multiple payments at the touch of a button.

While looking for a B2B payments platform for your business, be sure to speak with your sales representative about existing automation options. If none or few are provided, you may want to look for an alternative like Runa.

4. Assist with international exchange rates

Forex capabilities are a must-have in any B2B payment system. Without it, your business will have a hard time expanding into international markets.

Today, many businesses struggle to understand exchange rates for B2B payments. Acquiring a built-in solution with your B2B payment system can abate confusion, limit human error, and assist with international currency exchanges.

5. Provide real-time access to funds

Not all B2B payment platforms let you instantly receive disbursed funds. In fact, some put a hold on certain amounts or accounts, which could slow up your processing system or exacerbate existing inefficiencies.

Modernized B2B payment platforms don’t come with these restrictions. By integrating seamlessly with your accounting software and instantly reconciling payments, you can quickly access sent or received funds and keep business moving as usual.

Real-time access to funds also supports cross-border payments. Since users can send or receive funds 24/7, you don’t have to worry too much about time zones cutting into your retrieval dates.

6. Ensure high-level financial security

Fraud is on the rise within the business world, with an estimated increase of 134% in the first quarter of 2022. Choosing a B2B payment platform with bank-level security is one of the best ways to prevent the worst from taking place.

What does it mean to have bank-level security? For one thing, above-average encryption. This ensures bad actors or those with malicious intent can’t access your sensitive financial information. Bank-level security also provides two-factor authentication (2FA) to stop unauthorized users from accessing your details.

Keep in mind that bank-level security is only one element when it comes to peace of mind in your payments platform. It’s important to select a holistic solution that offers other ways to help you rest easy, including:

• Global support across multiple time zones. You should never have to wait to get the help you need, especially when your business requires answers quickly.
• Industry-leading uptime and performance. If your B2B payment system is down for the count, so are many other elements of your business — which is why choosing a platform with a history of stellar performance is a must for peace of mind.
• Access to resources that better inform your team. You should always have access to a comprehensive knowledge base that informs or clarifies your next steps.

7. Support an intuitive interface

B2B payment processes are complex enough as it is — so choosing an even more complex payment interface could prevent your system from functioning as intended.

If you want to avoid costly miscommunications or unwanted payout snafus, you should look for an intuitive B2B payment platform offering both customer support and transparent information. You should be able to:

• Onboard your team in as short a time as possible.
• Access additional documentation if and when necessary.
• Allow B2B vendors and clients to instantly use the platform.

Since platforms like Runa are available in multiple countries and languages, you can ensure even international transactions are completed quickly, seamlessly, and intuitively.

8. Offer insightful transaction reports

A more efficient B2B payment system begins with efficient reporting. Data-driven approaches are necessary for survival in an increasingly complex environment, which means reporting — not just manual analytics — is critical for efficiency.

You should look for a B2B payment system that provides the following types of financial metrics:

• Transaction date or time
• Transaction location or country
• Transaction volume (or amount)
• Transaction history

Platforms like Runa are equipped with built-in analytics regarding all your B2B payments. You can filter critical transaction data and take a closer look at revenue streams to empower better decision-making and enhance your payment process over time.

Leaning on Runa to draw it all together

Few B2B payment platforms have the ability to compete with an all-in-one payment platform like Runa. Our digital value infrastructure provides the scaffolding you need to create customizable payouts to other organizations in your network. No need to connect with multiple tools or platforms — everything you need is right at your fingertips.

With Runa, you can have:

• Fee-free payment structures that only bill for what you use. You don’t need to worry about expensive signup costs or scaling up before you’re ready.
• Real-time access to funds so you don’t need to wait longer than necessary for it to clear. You can save time, act fast, and slice your time to remittance by a significant degree.
• Our fast and effective onboarding comes with a gentle learning curve. Our onboarding process can get your team ready to start using Runa in 24 hours or less.
• Bank-level security that keeps your business safe from would-be attackers or bad actors. We are committed to protecting your sensitive details from criminals and managing financial data with the utmost respect for your protocols.
• More than 18 currencies and 30 countries to help your brand make effortless cross-border payments. Our platform supports 16+ languages to minimize confusion and support international growth.

If you’re curious to learn more about Runa’s all-in-one capabilities, you’re welcome to set up a no-obligation demo at any time. Our team would be happy to walk you through our built-in features and solutions, then help you explore our API and consider new possibilities for your brand.