B2B companies have adopted digital payments to ease their daily business operations. Over the last few years, B2B businesses have shifted preferences from cash to digital payments, facilitated by payment gateways.
While several B2B companies accept traditional payments (checks, cash), newer methods of payments have made online payments easier with UPI, net banking, and cards. How have B2B companies evolved after demonetisation? We take a look at the changes that have gone through and how B2B companies use payment gateways for online payments.
How are B2B Company Transactions Different?
A B2B transaction is when businesses play the role of customers with another business. The transaction can involve anything – right from office supplies to manufacturing parts and units. Services like accounting tools, email tools, etc also come under B2B transactions.
The need for payment gateways for B2B companies came in with the rise of digital payments. With growing businesses, it soon became difficult for companies to pay in checks and cash to multiple suppliers or vendors.
Why B2B companies need payment gateways?
Did you know faster and easier payments is one of the main reasons that can make or break a deal for a B2B company?
While buying supplies or services, businesses prefer to make payments in bulk. Buyers usually look to pay in multiple ways using different modes. They want to know their payment is secure. They want to keep track of their transactions and most importantly, they want to trust their business partners.
Traditional modes of payment for B2B companies do not allow that. Ease of payments is missing. Options are limited as well. Checks get bounced, cash becomes difficult to handle with bulk transactions. Therefore, adopting a payment gateway is a great way to get more customers for the B2B industry.
Benefits of B2B companies using a payment gateway/online payments:
Time is money, and a payment gateway helps take care of both. The reduced effort and room for fewer errors allow B2B companies to expedite transactions for one-time partners and regular vendors.
Always choose a payments solution provider according to your business model. As a B2B company grows, it’s payment needs change. Take a look at this flowchart to determine which payment solutions suits you the best:
Benefits of using a payment gateway:
- There is a huge difference in time and effort saved between handling paper checks and just clicking a button.
- Increases positive creditworthiness of buyer to the seller (guarantees the payment by one business to the other).
- Provides enough guarantee to the buyer that goods will be of specified quality. (escrow)
- Sellers feel more confident to conduct business with new parties without fear of fraud if the payment gateway is trustworthy.
- Collection of payments is faster, in one place and guaranteed to reach the client in the exact stipulated time.
- Eliminates the hassle, and security risks associated with cash.
- Provides tracking of goods delivery, invoicing, and payment notifications.
Reasons to move away from traditional payment methods:
For you: Cash and checks require you to physically mail invoices to the client, wait for them to respond, which takes a lot of time, effort and skill. B2B payment gateways remove this nuisance by enabling payment automation and recurring payment options for your business.
For your client: Customer success rates will drop for you levy penalties for late payments. Fortunately, with payment gateways, this is always taken care of. All parties stand to receive payments within a short period of time, and for an increased price, and with some companies, you can also receive Same day payouts.
How B2B companies use online payments:
There are several ways in which B2B companies use payment gateways. Here are some common examples:
1. Payment gateway integrated into a website:
Most B2B companies allow customers to make a purchase directly on the website. They integrate a payment gateway directly on their website that allows one to choose to pay with options like Debit/Credit Cards, UPI, Net Banking etc. Most businesses prefer paying through direct bank transfers (NEFT/IMPS) or Credit cards.
A 2018 study by MasterCard on B2B payments found 67% of businesses are satisfied with Credit Cards as a way to make vendor payments.
2. Bank Details on Website or Sent via Email:
Many B2B companies also make their bank details available on the website in the contacts or pricing/buy section so buyers can add the bank details directly into their accounts and make the transfer. Some also send the account details over email.
Some online payment gateways like Instamojo offer the NEFT option in the payment link and the account details are sent via email in just one click.
3. On-demand payment links:
On-demand payments have become the easiest way to collect payments online. B2B companies send payment requests on any platform like Facebook, Whatsapp, SMS, etc by just copy+pasting a link. Instamojo is one of the first companies that introduced simple payment links that you can share and collect payments with. A payment link allows you to offer your customer multiple payment modes including Credit Cards and NEFT – B2B favourites!
4. Recurring payments or recurring billing:
Many merchants or B2B companies set up regular billing for their customers so they don’t have to worry about paying at regular intervals. Recurring payments are usually set up via standing instruction to a bank account where the debit happens automatically at a certain date. The other way is through Credit Cards.
How Instamojo facilitates B2B payments?
Payment gateways make it easier for B2B companies to collect online payments. With Instamojo, setting up is as simple as 1-2-3. With usual payment gateways, it takes a lot of paperwork and technical knowledge to set it up.
With Instamojo’s payment gateway for B2B companies, you can set up a payment link and start collecting payments in less than 2 minutes with just a phone number and a bank account.