What are B2B payments? A definitive guide

What are B2B payments? If you’re a UK business owner, B2B payment methods are something you’ll likely come across at some point. Maybe you already have. As a result, you might be wondering what the benefits are of modern vs traditional payment systems. Or maybe you’re curious about what the future looks like for B2B payments.

Well, you’ve come to the right place.

In this guide, we’ll uncover everything you need to know about the B2B meanings and B2B payments. We’ll also explore the benefits of the TransferGo Business Account—a single, simple-to-use, multi-currency business account that reimagines the way UK businesses handle international payments.

Ready to get started? Let’s go.

What are B2B payments?

First up, let’s explore the term ‘B2B payments’. The B2B definition is ‘business to business’, with ‘B2B payments’ referring to transactions between businesses for the exchange of goods or services.

The term ‘B2B payment methods’ then refers to the various ways in which businesses can exchange money between each other for said goods and services.

Common B2B payment methods include bank transfers (wire transfers), credit cards,  ACH payments, cash payments and digital payment platforms such as TransferGo.

(Psst! If you’re wondering, ‘What is a B2B company?’, this can be defined as a business that sells products or services to other businesses, rather than consumers.)

Types of B2B payment methods

As stated above, there are many different B2B payment methods that UK businesses can use to make transactions. Each one has its own unique advantages and disadvantages. Let’s explore more.

Wireless transfers

Wire transfers help businesses transact funds in real-time. There are two types of wireless transfers: cash and digital.

The digital form is popular for e-commerce and other digital transactions and the transactions are usually completed within 24 hours, making them popular for UK businesses looking to make super-fast transfers. However, it’s worth noting that some wire transfers can have strict daily deadlines. 

For cash transfers, the recipient is required to visit a cash office or terminal to receive the cash. This can be more time-consuming, particularly if the terminals are far away. 

Credit cards

Credit cards are another popular B2B payment method used by businesses worldwide. The method is convenient and inexpensive and businesses can easily track payments via electronic or paper statements.

The downside of using credit cards is that they incur interest rates; however, businesses can get around this by paying the balance off each month to avoid charges. Another risk of using credit cards is the increased likelihood of fraud and theft. 

Cash payments

Many UK businesses still prefer to transact their operations using cash. It’s quick, easy and direct and there are no annual fees or transaction rates. 

However, if your business sells its products or services to faraway locations, cash payments can be difficult. There’s also a risk of fake cash being used in fraudulent transactions. Plus, when you always pay for goods or services with cash, your cash flow balance can be negatively affected.

Automated clearing house payments

Automatated clearing house payments (ACH) is another type of B2B digital payment but one that involves a third-party platform. ACH payments are fast, easy and cost-effective, making them perfect for B2B recurring payments. They can also be easily tracked and integrated into businesses’ ERP (enterprise resource planning) systems.

The downside of ACH payments is that they can only be made between accounts in the USA. Some banks may also limit how much money can be transferred within a single ACH payment.

Paper cheques

Paper cheques may be on the decline but they still offer benefits to UK businesses. Advantages include the fact that paper cheques are always traceable and they can help with budgeting since they don’t need to be deposited immediately. 

However, the downside of paper cheques is security. Since paper cheques contain a lot of personal information, they can be vulnerable to theft and fraud. Paper cheques can also prove too time-consuming for UK businesses looking to make and receive super-fast payments.

Digital payment platforms

Fintech companies have allowed UK businesses to make payments digitally without the need for a bank account. The TransferGo Business Account enables UK businesses of all sizes to send, receive and manage money from around the world, all from a simple-to-use multi-currency account.

The many benefits of a TransferGo Business Account include transparent pricing with no hidden fees, a 97%+ faster-than-promised delivery rate and state-of-the-security from start to finish.

Traditional vs modern payment systems

Modern payment methods are becoming increasingly popular, but some UK businesses still prefer using traditional methods. So, what’s the difference between traditional and modern payment systems and which one is better? Let’s find out.

Accessibility

Modern payment options tend to be faster than traditional ones, requiring (in some cases) only a smartphone to make money transactions from around the world. This helps UK businesses make multiple efficient transactions from different locations easily.

Meanwhile, traditional methods (like cash payments, for example) can cause difficulties because they require terminals and point-of-sale systems. This can cause a hassle if these locations are far away. 

Level of customer experience

Traditional and modern payment methods also differ in terms of the level of customer experience. Typically, customers can make fast and simple payments using mobile payment processing methods and customer support is usually available when needed.

With an average score of 4.7/5 on Trustpilot, TransferGo’s customer support team has a top-notch reputation, speaking up to 9 different languages and addressing 80% of enquiries within just 2 hours. 

Cost and efficiency

When it comes to costs, traditional payment methods can be more expensive than modern methods. This is because traditional options like cheques require paperwork, physical meetings and verification, which may require additional staff and processes.

Meanwhile, modern electronic payment solutions are fast, simple and affordable. The TransferGo Business Account aims to save UK businesses both time and money; it has zero setup fees or subscription costs and transfer margins are as low as 0.35%. 

Safety and security

Security is paramount when it comes to B2B payments. Traditional methods like cheques and cash are more prone to fraud and theft with fake cash and clone cheques not uncommon. Cheques also contain a lot of personal information, which can prove dangerous should the cheques fall into the wrong hands.

Meanwhile, modern payment systems like TransferGo use high-grade security protocols to keep your money and data safe. TransferGo also complies with all regulatory requirements, meaning each transfer is safeguarded until payout.

Digital B2B payment technologies

Digital business payments use a variety of technology that enables easy and efficient transactions. These can include:

• Blockchain technology: Blockchain makes transactions secure, transparent and traceable.
• Cloud computing: Cloud-based platforms allow businesses to access payment systems, analytic tools and data storage without the need for physical infrastructure.
• Digital wallets: These help businesses send and receive payments through mobile or web interfaces and can be integrated with existing accounting and invoicing tools.
• Automated Clearing House: ACH networks enable businesses to process payments electronically and are popular for regular or subscription-based services.
• Multi-currency accounts: Multi-currency accounts, like the TransferGo Business Account allow businesses to send, receive and manage money from all around the world, saving businesses both time and money in the process.

Security in B2B transactions

Financial security is paramount when it comes to business operations. Below are some of the implementations in place to help make B2B transactions as safe and secure as possible:

• Multi-factor authentication (MFA): MFA is a popular security method that requires users to provide at least two forms of verification in order to make or access a payment. This can include passwords, passcodes, fingerprints, security questions and facial recognition ID.
• Data encryption: This method protects data from unauthorised access and employs advanced encryption standards to maximise financial security. For example, TransferGo uses end-to-end encryption to protect its customers’ data and money.
• Digital signatures: Typically, digital signatures help to identify the parties involved in the transactions and confirm that documents haven’t been altered. This helps to ensure the sender’s identity and prevent fraud.

Choosing the right B2B payment solution

Choosing the right B2B payment solutions depends on your UK business needs. Since each method has different pros and cons, it’s important to evaluate your processes and requirements and go from there. Here are some of the factors to keep in mind:

1. Scalability and adaptability: If you plan to expand your operations in the future, it’s important that your B2B payment solutions are adaptable and scalable.
2. Security: Ensure your B2B payment solutions are safe and secure to prevent fraud and other types of theft. Always check whether your payment options comply with data protection and industry laws.
3. Customer support: Having help at hand is paramount when it comes to B2B payment methods. Make sure your payment methods have a dedicated customer support team that can provide help when you need it.

Benefits of advanced payment systems

Advanced payment systems go beyond traditional payment methods like cash and cheques and are particularly useful for UK businesses making international transactions. Some of the additional benefits of advanced payment systems include:

3. Enhanced security protocols—thanks to authentication and encryption
4. Speed and convenience—thanks to real-time payments and 24/7 accessibility
5. Improved user experience—thanks to seamless integration and flexible payment options
6. Cost-efficiency—thanks to reduced operational costs and lower transaction fees
7. Improved cash flow management—thanks to automated payments and real-time monitoring
8. Reduced risk of cash handling—digital payments reduce the risk of loss, theft or human error
9. Increased transparency

Future trends in B2B payments

So what does the future look like for B2B payments? Well, it’s impossible to predict entirely. But past and current trends, as well as the advancements in technology and the growing need for security, efficiency and automation suggest that:

Digital platforms will become more automated—the rise of artificial intelligence (AI) and machine learning (ML) will continue to automate payment processes and optimise cash flow management

The use of paper cheques will continue to reduce—businesses will continue to opt for faster, cheaper and more secure payment options

Real-time payments will become a standard expectation—as businesses can now make immediate payments and settle invoices, real-time payments will become the norm

Integrations of financial services will increase—businesses can now integrate their financial services with non-financial platforms to increase efficiency and improve cash flow

With online payments becoming the norm, read our guide to online payment processing here: A complete guide to online payment processing.

In conclusion

When it comes to B2B payments, UK businesses are increasingly moving towards modern B2B payment methods. This is because they tend to be faster and more secure, convenient and affordable.

One of the best tools for UK businesses looking to make regular B2B payments is the TransferGo Business Account. Whether you’re a sole trader, run a multinational operation or manage an ambitious scale-up, it’s tailored to streamline your cash flow and save you time and money.

With one account, you can hold and exchange multiple currencies and maximise your efficiency and profit thanks to local and global account details. What’s more, transfer speeds are super-fast and you can pay up to 50 suppliers in one go with its batch payments feature. Finally, its multi-lingual Customer Support team (which speaks up to 9 languages) comes with an average customer rating of 4.7/5 on Trustpilot. It’s no wonder that 40% of customers come to TransferGo from word-of-mouth recommendations!

Are you ready to reimagine the way you make B2B payments? Sign up for TransferGo today!