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Accepting B2B Payments? What You Need to Know

Are B2B payments any different from traditional B2C transactions? Are there special precautions you should adopt if you deal predominantly with other companies?

The short answer is yes. 

However, the line between B2B and B2C isn’t always so distinct. Consider, for example, a restaurant that caters to hungry patrons:

  • some of whom pay with consumer credit cards
  • some of whom are there for "business" luncheons

Is that restaurant a B2B service provider or a B2C one (or both)?

As payment technologies, service levels and clientele continue to evolve, it becomes easier to merge best practices from both the consumer and B2B worlds. For example, payment security is critical no matter what target audience you service. Ordinary shoppers take their financial privacy very seriously — as do corporate stakeholders.

Yet when dealing exclusively with business clients, there are certain B2B payment considerations, including:

1.  Avoid Paper-Based Checks at All Costs

Many businesses are so happy to receive new payments that they don't mentally work through all of the associated fees. That paper check that you just received in the mail may end up costing you far more than you realize. Typical “hidden” expenses include:

  • Paper and postage for invoices
  • Printers, fax machines and photocopiers
  • Ink cartridges (they are in a category of their own)
  • Processing delays, missing checks and visits to the bank and post office

When all is said and done, you might end up spending anywhere from $4 to $20 — assuming that you're dealing with a "good" check that doesn't bounce. There is also an environmental cost when both you and your clients are dealing with paper.

Encourage your clients to use electronic payments, ACH options or wire transfers instead. If you have a client who insists on using paper-based payments, charge them a little extra (and explain why).

2.  Weigh the Pros and Cons of Credit Card Payments

As a general rule, companies don't like to use credit cards for B2B purchases.  Each transaction results in a 2 to 5 percent fee for the merchant — plus interest charges for the buyer.

On the surface, avoiding credit card payments is a no-brainer.

Although you may want to rethink that strategy, there are times when accepting plastic makes sense.  Some businesses place a premium on the speed, data integration, security and growth potential that credit card payments offer.

3.  Additional Layers of Security

As mentioned before, security is a major concern for both the B2C and B2B crowds. Yet if you cater primarily to businesses, you’re usually dealing with a smaller pool of clients, and just one instance of fraudulent activity or a data breach can cause irreversible damage to your reputation.

If you accept credit card payments, becoming PCI compliant is basically required.  Yet even if you don't accept plastic, following these data security standards is a very good idea. In fact, you should take a close look at the most recently released PCI guidelines. They deal specifically with how businesses should manage payment security amongst vendors, suppliers and other B2B partners.

Depending on your business, you might also explore different credit card processing levels — based on the needs and security requirements of your clients.

Need Help Fine-Tuning Your B2B Payment Options?

At BluePay, we specialize in B2B payment processing. Let us help you select a solution that:

  • Maximizes your growth potential
  • Minimizes your processing expenses
  • Optimizes your payment security

To get started, schedule a free appointment with our B2B payment team today.

Topics: B2B

Welcome to the BluePay Blog!

Whether you're a small business, an enterprise corporation, a financial institution, or a software partner, we have created a series of blog posts to help you and your customers, learn more about the complex nature of payments. Take a look to learn how payments can help to simplify your business operation, and may even help to grow your revenue.

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