Best Payment Methods for Your Business

When you’re selling to other businesses, it’s not just a matter of what you sell, but how you sell it. Offering the right B2B payment methods can make the difference between closing a sale and missing out, affecting your overall cash flow, profit margins and customer relationships. With more businesses selling online, there are now more ways to pay than ever, from traditional channels to ecommerce payment processing.

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What are the best B2B payment methods for your business?

When it comes to B2B payment options, finding the right fit means balancing speed, cost, and the preferences of your customers. 

Some companies work best on the simplicity of bank transfers, while others rely on credit cards or digital wallets for real-time payments. Even cheques still have a role, particularly for businesses wanting a paper trail.

Common methods to be aware of include:

• Bank transfers: A staple for high-value deals. Known for reliability and lower fees, though you might face slower clearance times.
• Credit cards: Great for smaller-scale B2B transactions but watch out for higher processing fees and potential chargebacks.
• Digital payment platforms: Platforms like PayPal or specialised B2B gateways can handle invoicing, payment reconciliation, and multi-currency payouts.
• Cheques: Still used in certain sectors or regions for traditional reasons, but can slow your incoming funds.

By offering more than one type, you have a chance to serve a broader client base. You can also incorporate advanced tools like B2B buy now pay later (B2B BNPL) to offer familiar net-30 or net-60 payment terms on invoices while still getting paid upfront.

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How B2B e-commerce payment methods impact sales and cash flow

Online customers in particular expect a smooth checkout experience, including when it comes to B2B e-commerce payment methods. 

An overly complicated or slow payment flow can cause potential buyers to abandon their carts, directly hurting your revenue. On the other hand, making it straightforward to pay by can drive higher volume orders, bulk purchases and quicker settlements. Here’s why it matters for your sales and cash floe:

• Speedier transactions and faster payment: Automated systems settle payments faster, so you see cash in your account with minimal lag.
• Wider market reach: Accepting diverse B2B e-payment methods, from credit cards to local e-wallets, makes it simpler to attract international customers who depend on B2B cross-border payments.
• Reduced error rates: Digital payments with built-in invoicing reduce the likelihood of manual data entry errors.

To optimise your ecommerce payment processing, look for platforms that integrate with your store as well as your CRM or ERP. This can help you match payments to orders in real time, to avoid billing issues and keep operations running smoothly

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Should your business offer trade credit or Buy Now, Pay Later?

Offering trade credit or a B2B BNPL solution can increase order sizes and encourage buyer loyalty. But each method carries its own pros and cons.

Trade credit (like net-30 or net-60) means you’re extending a line of credit directly to your customers. Recent research from iwocaPay found that the number of B2B sellers offering at least 60 day payment terms has doubled since 2020, but traditional trade credit brings its own risks. If your customers pay late, your trade receivables go up and you could be left out of pocket.

B2B Buy Now, Pay Later in collaboration with a third-party provider is an easier, more secure way to offer trade credit, giving customers the B2B instalment payments they want while ensuring your business is paid upfront.

This removes the need for safeguards trade credit insurance to manage potential losses when offering trade accounts, while still providing a familiar, flexible purchasing experience for customers.

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How can you reduce payment delays and improve cash flow?

For many business owners, delayed payments are a constant headache, especially when customers are demanding flexibility. Between April and June 2024, payments to small businesses were made an average of 7.3 days late, which marked the largest quarterly increase in four years. If you're looking to offer trade credit, it’s worth thinking ahead about how you can secure your cash flow.

1. Use automated invoices and reminders: The first step in getting paid on time is to send invoices immediately, with clear payment terms, with regular reminders as payment dates approach.
2. Set shorter due dates if necessary: While customers will usually ask for as much time as possible, it’s important to look out for your own working capital needs. If you traditionally offer 60 days, consider shifting to 30 or 45, as long as it suits your customers’ cycles.
3. Early payment incentives: Offering a small discount can encourage buyers to pay before the deadline.
4. Penalty clauses: If late payments persist, charging nominal interest might motivate clients to prioritise you first.

In addition, don’t forget the human aspect. A friendly, consistent communication style, especially with major customers, goes a long way toward achieving prompt settlements.

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How can you secure B2B online payments and prevent fraud?

Safeguarding online B2B transactions starts with knowing exactly who you’re doing business with and managing the risks tied to each deal. 

Before extending credit or allowing large invoice amounts, take the time to conduct robust due diligence. This could mean verifying legal company details, checking trade references, and reviewing payment histories. Other ways to reduce risk include:

• Shorter payment terms: Reducing nect terms (e.g., from 60 to 30 days) limits how long your capital is tied up and how long you’re exposed to non-payment.
• Part or full prepayment: Taking a portion, or all, of the invoice total upfront ensures you’re not bearing 100% of the credit risk.
• Avoid high-risk methods: While some customers may insist on slow or untraceable payment channels, it’s worth considering more reliable alternatives that provide clearer records or faster settlement.
• B2B BNPL: A solution like iwocaPay protects cash flow by paying you upfront, while the provider handles collections from the buyer. This reduces late-payment worries and helps you maintain strong working capital.

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How can your business handle cross-border B2B payments efficiently?

Tapping into international markets can be a powerful avenue to growth, but it brings extra considerations like currency conversion, compliance rules, and extended lead times. 

1. Localise your payment options: Some regions favour specific payment types like direct bank transfers or digital wallets. Matching your payment methods to local preferences increases your chance of closing the sale.
2. Use multi-currency accounts: Holding multiple currencies can help you avoid constant exchange costs and reduce volatility, though this requires maintaining multiple accounts.
3. Focus on FX tracking: Real-time information on exchange rates lets you decide when to convert funds, avoiding expensive last-minute swaps.

If you’re working across borders, it also pays to stay on top of taxes, tariffs, or data privacy laws so you don’t face penalties for non-compliance. 

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Why should you automate B2B payments to save time and money?

Manually juggling invoices, reconciliation, and reminders is both time-intensive and error-prone. Implementing targeted automation reduces friction at every stage of the payment cycle:

• Efficiency gains: Once set up, recurring billing or scheduled payments can ensure funds come in regularly, without manual chasing.
• Consistency: Automated processes can apply the same rules every time, reducing the chance of missed invoices or double charging.
• Real-Time reporting: With connected payment systems, data syncs with your accounting system, giving you instant visibility into which payments have cleared and which are overdue.

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What UK payment regulations are changing, and how will they affect your business?

The UK is introducing several regulatory changes aimed at enhancing transparency, security, and efficiency in payment processes. Key ones to know include:

• National Payments Vision (NPV): The UK government has introduced the National Payments Vision which aims to modernise the payments infrastructure, aiming to foster innovation, enhance competition, and bolster security through new technology. 
• Reforms to Safeguarding Rules: The Financial Conduct Authority (FCA) plans to implement stricter safeguarding regulations for payment firms handling customer funds. These reforms aim to ensure higher standards of customer fund protection, particularly in insolvency scenarios. ​
• Reporting on payment practices and performance: Amendments to the Reporting on Payment Practices and Performance Regulations extend the reporting obligations for large businesses until April 2031. Starting from financial years beginning on or after January 1, 2025, companies must disclose additional information, such as the total value of payments not made within the agreed period and the percentage of invoices disputed.

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What are the most secure B2B online payment methods?

The safest B2B payment methods are those that blend robust encryption, verified user authentication, and human oversight. At a basic level, direct bank transfers with layered security checks often rank among the most trusted. For more complex setups, credit cards paired with tokenisation and compliance standards (like PCI DSS) can safeguard cardholder data.

• Secure e-payment platforms: Providers often have anti-fraud protocols, machine-learning tools, and 24/7 monitoring.
• Tokenised card transactions: Actual card details never reside on your servers, slashing the risk of a breach.
• Multi-step verification: Requiring unique user logins and limiting who can issue or approve invoices adds additional layers of oversight in your business.

A key focus should also be clear policies for processing large orders or new trade partners, minimising exposure to buyers you don’t know well.

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How can I offer trade credit or BNPL without risking cash flow issues?

When extending trade credit, the main protection lies in solid groundwork: due diligence on prospective buyers, setting clear credit limits based on payment history, and adjusting or suspending terms if invoices stay unpaid. This ensures you have a good grasp of each customer’s financial reliability before taking on risks like net-30 or net-60 deals.

However, B2B BNPL can make this process much simpler. With iwocaPay, you can offer flexible payment options while still getting paid in full upfront. 

This way, your customers gain more breathing room, and you eliminate the headache of chasing late invoices or defaulting buyers. iwocaPay handles the repayment process for you, meaning you effectively outsource the credit risk to a partner that specialises in managing it.

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What’s the best way to accept international B2B payments?

For many businesses, the best approach to global transactions involves offering multiple payment methods, like credit cards, local bank networks, and e-wallets, while displaying fees and exchange rates up front. 

A typical set-up could include:

• Multi-currency checkout: Let buyers pay in their home currency when possible to streamline conversions.
• Localised payment gateways: Some countries have a preference for local platforms over international card schemes.
• Straightforward fees: Surprises at checkout drive overseas customers away; outline charges (if any) before they commit.

You can also enhance your international expansion by offering B2B BNPL with a partner like iwocaPay, minimising your credit risk with new customers, while still offering flexibility.

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How to combine flexibility with cash flow security

The right B2B payment methods should offer security for your business and flexibility for your customers, which means balancing payment terms and your cash flow. But what if you didn’t have to choose?

iwocaPay is a simple way to offer your customers extended payment options while still getting paid up front. By letting iwocaPay handle repayment, you can provide net terms or BNPL without taking on the risk. This means you secure bigger orders, boost repeat business and eliminate the headaches of chasing overdue invoices.

With iwocaPay, you get:

• Instant payouts: Receive your funds right away, instead of waiting for customers to settle.
• No additional credit risk: iwocaPay handles default risk so your cash flow stays steady.
• Straightforward setup: Easily integrate iwocaPay into your current sales process, with no complicated overhauls needed.‍
• Satisfied customers: Offer more purchasing power to your buyers, encouraging larger and more frequent orders.