At the rapid rate that payment technology is evolving, it’s no surprise that the business world is adapting to these changes. More companies are ditching brick and mortar in favor of online shopping, and automation is being adopted across the private sector. Business-to-business (B2B) payment methods, however, have struggled to implement these evolving practices. While customer-to-business (C2B) payment transitioned seamlessly, the B2B payment space has lagged behind.
B2B payments are transactions between two businesses on a recurring or one-time deal, such as manufacturers, distributors, wholesalers, and retailers. These purchases are often made in bulk and can prove to be very expensive, not to mention more complicated than C2B transactions. Purchase volume, transaction history, and the relationship between the buyer and seller are all factors that play into the smoothness of the operation.
Manual and paper-based processes are still relied on heavily because of this. There has been a movement toward automated payment systems in recent years, though. B2B buyers and suppliers are implementing digitization methods that make transactions simpler while efficiently delivering timely payments.
Partly due to the COVID-19 pandemic, the digital transformation push has caused 68% of small businesses to decrease their paper check and cash usage. By 2025, 80% of B2B transactions could be digital. Cash may be king of the B2B payment world right now with 45% of transactions being done this way, but electronic disbursements are the way of the future.
For more information on B2B payment methods and emerging trends, please see the accompanying resource.
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