Traditional B2B invoicing, on-account arrangements and payments by checks prove increasingly inefficient when companies can get immediate payments using credit cards and integrating other mobile payment systems into their eCommerce platforms. Technology and faster communications, secure encryptions of financial information and growing acceptance of mobile payments are influencing business-to-business organizations to offer more payment options to their customers. Integrating multiple payment solutions not only leads to faster payments and better cash flow but also simplifies accounting and provides backup verifications of customer payments for taxes, financial reporting and borrowing capital for business expansions.
Consumer buying behavior drives the mobile payment industry, and companies like eBay and Amazon have encouraged greater consumer acceptance of paying for goods and services with mobile payments and new technologies like Apple Pay, Samsung Pay, Google Wallet and Bitcoin. PayPal now handles vast numbers of online payments, and anyone can use its system to send or receive money. Some eCommerce implementations still require using the traditional payment processes of negotiating prices, submitting purchase orders and invoicing clients, but more and more companies and buyers are taking advantage of omni-channel payment options. Paper checks are subject to theft, generate high processing costs and are often returned by banks for insufficient funds. Studies show that eight billion invoices paid by check cost U.S. businesses $100 billion in annual processing costs.[1]
Most B2B companies struggle to implement electronic payment systems primarily because of the challenges of integrating with out-of-the-box accounting software and antiquated legacy systems. However, 91 percent of all adults now use mobile phones and can easily pay companies directly with debit checking cards, credit cards or other mobile payment options.[2] Customizing a B2B website for multiple payment options provides long-term benefits that will only increase with time and enable increased automation of company processes. These include automated options for recurring billing, interactive voice response or IVR technology for confirming orders and taking credit card or billing information and Virtual Negotiation technology for speeding agreements and handling payment disputes. Mobile payments grew more than 9 percent annually in 2013 and now account for more than 40 percent of global revenue.[3] McKinsey predicts a sustained annual growth rate for mobile payments in excess of 6 percent that should surpass $2 trillion annually by 2020.
Accepting multiple payment types increases the value of any eCommerce platform by empowering customers and simplifying the billing-payment cycle. It's a new world for B2B companies that stand to benefit from these technologies, but there are issues to consider. Most mobile payment services charge percentages of transactions, fees for each transaction and standard monthly charges that can increase product costs and reduce profits.
New regulations also increase the standards of care that companies must provide to ensure that financial information stays secure. B2B companies that also sell retail products usually have multiple payment systems in place, but companies that only sell to businesses might need to learn the ins and outs of mobile payments, POS software and using credit card intermediaries. Most businesses find that integrating these payment systems are worth the extra effort. The benefits of doing so for B2B organizations include:
- Satisfying customer demand for alternative ways to pay
- Enabling mobile payments from anywhere at anytime from any device
- Speeding payments with mobile invoicing
- Increasing customer convenience and fostering better user experiences
- Enhancing data-mining intelligence gathering
- Optimizing sales reporting and income verifications
- Improving financial transparency
- Strengthening traditional B2B billing practices
- Allowing salespeople to accept payments in the field without asking customers for confidential financial information
- Empowering proprietary app users to view invoices and remit payments directly from within their apps
- Accepting multiple currencies and performing automatic conversions through payment-provider intermediaries
Mobile payment options become increasingly important for B2B companies to remain competitive, and most companies should offer their buyers the most popular payment options at a minimum. The easier that companies make paying for products, the faster they get paid and the more customers they attract and satisfy.