In a world driven by technological innovation, businesses of all sizes are embracing change to remain competitive and efficient. However, the realm of business-to-business (B2B) payment methods has experienced a slower transformation compared to other sectors. While customer-to-business (C2B) payments have adapted swiftly to emerging technologies, B2B transactions are just starting to catch up. This introduction offers a glimpse into the disruptive impact of modern payment technology on B2B transactions and the emerging trends that are reshaping the landscape.
First, it’s essential to understand what B2B payments involve. These transactions encompass the exchange of money for goods or services between two business entities. The payments may be one-time transactions or recurring, depending on the agreements between the buyer and seller. Business entities participating in B2B transactions include manufacturers, distributors, corporations, wholesalers, and retailers, among others.
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In contrast to the simplicity of C2B transactions, B2B payments are often more complex. They frequently involve substantial sums of money and large quantities of goods, making purchasing decisions more intricate and time-consuming. Several factors come into play in determining the efficiency of these transactions, including purchase volume, payment history, and the relationship between the buyer and seller.
Traditionally, B2B payments have relied on manual and paper-based processes. However, there is a noticeable shift towards cloud-based, automated payment systems that are transforming the landscape. Increasingly, B2B buyers and suppliers are recognizing the potential of digital solutions to streamline the buying and selling process, resulting in faster and more efficient business payments. The recent global pandemic played an unintentional role in accelerating this digital transformation. In the wake of the pandemic, 68% of small businesses reported reducing their reliance on cash and paper checks, primarily due to the time-consuming nature of deposit processing. It is anticipated that by 2025, 80% of B2B sale interactions will occur in digital channels. If you are interested in learning even more about emerging B2B payment methods, check out the resource below.
Infographic created by CardConnect, an ISO credit card processing company