Preferred payment methods for B2B segment in the USA

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Preferred payment methods for B2B segment in the USA

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Every commercial interaction across the globe has unique features that shape the choice of payment methods. B2B sales models are not an exception. Moreover, B2B sales in the USA have their own specifics. This demanding e-commerce market ranked the second largest in 2021. So, let’s sort the things out.

B2B sales: specific features

The B2B or business-to-business format of business relations has distinctive characteristics worth checking before diving into the details about payment methods in the USA.

  • Average check size. The transaction size between businesses can reach tens of thousands of dollars. Significant figures and expensive products increase the bill because companies are willing to pay a high price for the necessary resources.
  • Cost per lead. With long and complex sales algorithms, the cost of one new customer is much higher than in the retail business model.
  • Sales cycle length. The process of decision-making in the B2B segment is much longer. And there are good reasons for that. The deal between the two companies is different from a decision between a customer and a seller. B2B sales always involve a chain of people from each stakeholder, negotiations, agreement, and documentation preparation. That’s why it may sometimes take months and even years before closing the deal.
  • Requirements for managers. The sales managers need to know not only their product perfectly but also be well versed in the market situation and the specifics of the work of potential customers. Skills in negotiating and knowledge of how to win the client are essential.
  • Flexible discount system. In the B2B sector, the final value of goods and services is often determined in the negotiation process. And in some cases, business sellers have to offer discounts to get a long-term contract with a client.
  • Quantity of customers. Compared to the business-to-client segment, the market for potential business clients is narrower. But at the same time, fewer companies supply goods and services, so the choice of possible options for cooperation is also limited.

How to choose B2B payment methods?

B2B payment processing is more sophisticated than that of business-to-consumer. Nothing is more critical for B2B customers than the ultimate convenience of making payments and the available payment methods. The latter may even become a crucial factor when deciding whether to buy from a business. An effective payment solution with different payment options increases brand reputation and customer loyalty and helps retain customers.

One of the key points in the choice of payment methods in B2B is your audience geography.

Are you dealing with local or international customers? Or maybe with both? Defining this will help you choose more precisely.

Local payments

Such methods as ACH payments and checks are a good choice for internal business payments. Long crediting time and the need for manual processing make these payment methods inefficient for use with international customers. Despite the limitations, these options still make up a large part of internal business transactions.

International payments

Attention to international payment options allows B2B companies to increase their reach. The critical point of international payments lies in multicurrency payment acceptance. By utilising multicurrency payment solutions, businesses attract customers across the globe, making their products or services available for buying without the need to exchange funds.

So, there are several options for international businesses, and each of them has its pros and cons:

  • SWIFT. Bank-to-bank transfers are popular in the B2B, especially for large international payments. They are secure and usually take a few days to process, but they are often not easy to trace. The last point can be a problem if the payment is not received on time.
  • Invoices via billing software solutions. Accounting software allows merchants to quickly send invoices to their customers for easy payments. However, such software is usually sold on a subscription basis, which is another item on the list of business expenses.
  • International business accounts. International business accounts with global payment providers are convenient for businesses and users. It is easy to send invoices and use the funds after payment is received. For the customers, it provides a wide choice of payment methods.

What are the popular B2B payment methods in the USA in 2022?

Rapid technological development changes the ways businesses and consumers pay and accept payments. For companies working with other businesses, using certain payment methods has specifics compared to consumer-oriented businesses. The biggest challenges in managing funds for B2B companies are the international payments and high fees. Let’s clarify the most appropriate payment options for use in the US nowadays.

  • ACH payments. All US banks are connected to an ACH network, which allows for making digital payments inside it. This form of paying for goods and services is one of the most used B2B payment methods in the USA – 53% of respondents marked this method as the most preferred in 2018, and in 2021 more than 5 billion payments were made worldwide using this option.
  • Checks. Electronic checks are a convenient and secure payment method. They can be easily sent to a client via e-mail, securely signed, and the payment is made. But they still have drawbacks – low speed of transaction, costly processing, and the risk of making an error. As statistics show, this method is a bit outdated but still used by some companies that haven’t yet switched to modern digital payment solutions.
  • Wire transfers. This type of electronic fund transfer is secure and fast. It can be used for international payments. But still, this option is not so widely used due to high fees, the difficulty of tracing, and the risk of making mistakes.
  • Credit card payments. One of the fastest and easiest ways to pay. But it is not so widely used in B2B segment as other options due to credit card fraud and monthly limits. As far as business-to-business payments are often quite large, these reasons influence the frequency of using this payment method.
  • Digital payment solutions. Greatly simplifying the payment process, such platforms are often used for B2B payment processing. Among the advantages are relatively low fees and high speed of transactions. These can be solutions like Payoneer, Paypal or those connected with bookkeeping, like Zoho Books or QuickBooks.

So, as you see, the ACH payments and checks still hold the top positions of the most used B2B payment methods in the USA. In one of our previous articles, we’ve also described how to choose the best payment gateway in the USA, the insights from it will be helpful to know for those planning to run or expand their business to this region.

We at Corefy provide businesses with a holistic payment processing solution that is helpful for both B2C and B2B segments. We process payments in 400+ methods in a range of currencies and support 650+ providers for our customers to offer convenient and reliable payment options to choose from. So, feel free to contact us for more information and our assistance in choosing the best options for your business needs.

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