It can be a challenge for B2B business owners to manage funds internationally without paying high fees or risking insecure payment services. Traditional options like checks, credit card payments, and wire transfers are familiar, but they can also come with expensive fees and take time to clear.
New electronic payment services like Payoneer can be faster and lower-cost, but you might not know enough about them yet to feel comfortable making the switch. It’s worth getting to know all the alternatives, so you can choose a way that’s secure, quick, easy to understand, and inexpensive to make and receive B2B payments.
Here are some of the different B2B payment methods in the US, and information about which ones are the most popular.
Checks are a traditional payment method, and because they are securely signed and have anti-fraud measures, you can send a check in the mail. Some companies use electronic checks, which make it easier to record payment information.
But according to Statista, the check is the least preferred method of payment for B2B companies in the US. 41% say they don’t like taking or paying by check, and only 11% say they prefer it.
The only reason they are still in use at all is because a number of established companies haven’t yet switched their finance processes to more modern, digital payments. Checks take a long time to clear, and it can cost a lot to process and deposit paper or electronic checks.
Wire payments like SWIFT payments are a specific type of electronic fund transfer (EFT). Wire transfers aren’t much more popular than checks. They are secure and fast, and you can use them for international payments, but just 12% say that wire transfers are their preferred payment, and 35% dislike them.
That’s mainly because they are expensive, with very high fees. What’s more, if you make a mistake, you can’t cancel the payment. Wire transfers are also very difficult to trace, so if a payment goes missing or you need to do an audit, you’ll struggle to follow the payment trail.
Credit card payments are very easy to make, and the funds can clear relatively fast. Credit payments are also useful for businesses that are having cash flow issues, because there’s some time before the money leaves your account. That said, they have their drawbacks for B2B payments.
Credit card fraud is on the rise, making both buyers and vendors nervous about using them for recurring payments or for large payments. Most credit cards have limits on how much you can spend each month, and many B2B purchases would use up a lot of that limit or even exceed it.
B2B companies are more or less equally balanced when it comes to credit card payments. 18% would rather not use them, while 22% find them convenient.
ACH stands for Automated Clearing House, and it’s a type of electronic payment that’s run by the National Automated Clearing House Association (NACHA) in the US. There’s an ACH network connecting all US banks, so payments that use ACH are safe and fast, and also relatively low cost.
According to Statista, in 2018, ACH payments topped the list of preferred payment methods. 53% say it’s their preferred choice, and only 6% don’t like to use them.
But ACH payments aren’t so convenient for international deals, and today, business is global. If a US B2B company makes a sale to someone in a different country, they would have to set up a complicated ACH interface to use the ACH system.
Today, there are more and more digital payment services for B2B companies to use. These are secure online platforms that simplify the process of making a payment. Fees are often quite low and funds clear quickly, sometimes even instantly if the payment isn’t too large.
Some digital payments use a credit system to send the payment, and then charge your bank account. Others connect directly with a bank account, so they debit the money from the buyer’s account and use an EFT to send it straight to the seller’s account.
Digital payment methods can also connect with smart bookkeeping software like QuickBooks or Zoho Books. That way your software can issue invoices and receipts automatically and make sure your accounts are always balanced, which saves time and headaches.
Payoneer offers an easy to use, totally digital way to handle secure cross-border payments. You can use it to accept payments through SWIFT bank transfers, credit cards, or ACH payments, and to send payments through debit or credit cards or ACH secure bank debit. You can also make and receive in-network digital payments to another Payoneer account that are free, and can clear in as little as a few hours.
Once you have a Payoneer account, use it to open a receiving account in local currency, so you can skip the high currency conversion fees and get paid as though you had a local bank account. Payoneer helps you manage currencies, pay contractors, suppliers, or remote employees in their own currency, and withdraw funds in over 150 countries and currencies, making it easy to manage money for your B2B business.