The complexity of the B2B requirements in the field of e-payment poses a challenge that many companies do not dare to face. However, it is precisely the flexibility of payment methods that offers potential to reduce insecurities, drastically improve the user experience and thus increase conversion.
With the progress of digitalization, customer needs are changing and at the same time new possibilities are opening up, creating added value for buyers and sellers. Using and offering digital payment options can help to overcome challenges and problems such as bounced checks, charge-backs of loans or purchase cancellations.
Payment Flexibility as an Opportunity
When manufacturers and wholesalers offer a range of payment options in their web shop or customer portal, ideally with a focus on mobile commerce and Payment Service Providers (PSP) such as PayPal, they gain a competitive edge. To understand why a wider range of payment methods can have a positive effect on B2B transactions, we need to take a look at the specific requirements of B2B and its payment methods. This helps us to identify potential for reducing costs and increasing safety.
B2B Transactions: Why Is There Room for Improvement?
In the B2B sector, the decision to buy is influenced by parameters such as delivery time, customer service and user-friendliness. Clarity and flexibility in terms of payment options are particularly important. Like all transactions, they involve uncertainties: Who is the transaction partner and what fallbacks are there if a deal is not kept? The B2B sector is all about trust. For this reason payment uncertainties have a strong impact on the business relationships and directly on the cash flow of the companies.
Common B2B Payment Methods and Their Difficulties of Application:
- Trade credit
- Credit approval required
- Cooperation with third parties for credit financing
- Payment with order confirmation
- Long process from order to payment
- Personnel costs for non-automated process
- Cash on delivery
- Cash flow delay
- Check
- Transaction costs
- Error rate in processing
- Bank transfer
- Time delays
- Credit/debit card
- High interest rates and fees
- Risk of chargebacks
- ACH payments (electronic money transfer between financial institutions)
- Set-up costs
- Transaction fees
- The transaction can still be carried out by the buyer up to 90 days afterwards
The New Payment Options
B2B commerce can adopt payment methods from the B2C sector, such as third-party financing. Thus, providers such as Paypal, Klarna or AmazonPay convince with high fraud protection and almost completely automated payment options. An immediate payment at the end of the order can create real added value also in B2B. The intuitive user interface and the fact that the customer's payment data are already stored allow for a reduction of effort, time savings and financial clarity.
Customer Centricity - What Do Customers Want?
Customers want to act self-determined. Who doesn’t want to choose their personal favorite payment method? By handling the payment process directly and individually, the customer experience is improved and possible purchase barriers lowered. The more payment methods are available in the online shop, the more interested parties can become buyers and thus customers.
Advantages of E-Payment
E-payments enable a continuous and positive cash flow by immediate processing (24 - 48 hours). In addition, the check of the customer's creditworthiness can be integrated into the payment process by using technology and algorithms. Further automation is also possible, such as sending invoices or payment requests. This facilitates the payment process not only for the seller, but also for the buyer.
Data - the Gold of the 21st Century
Digital payment methods allow to obtain and generate interesting data. These can be used for validation and modification in product marketing or customer service. For example, marketing campaigns can be carried out more target-group specific by customer segmentation.
5-Steps Payment Guide
Manufacturers and wholesalers are striving to increase and improve customer experience. However, the availability of more payment methods is not necessarily the best solution. Which payment methods are the right choice to offer depends on many factors:
- Which products are sold?
- Which regional markets are served?
- What relationship already exists with the customer?
- What methods do the competitors offer?
- Which payment methods do customers use and know privately from the B2C sector?
Payment Flexibility and Variety with the Concardis Service Connector
The answer to the question "Which payment method is the right one and do I really need several payment methods?" seems very complex.
In order to deal with this complexity, we decided to work with Concardis. Our Concardis Service Connector enables the flexible integration of more than 250 payment methods for your online business. This allows you to focus on the needs of your customers and enables secure, fast, simple and transparent sales procedures.
If you have any questions about payment, B2B, the Concardis Service Connector - download the Fact Sheet and learn more!
