B2B Credit Card Processing
According to the BI Intelligence report
, despite reaching approximately $18.5 trillion in volume and vastly outpacing B2C and C2C, B2B payment processing still lacks the level of innovation found in the previous two realms. In large part, this is due to the complex nature of B2B payment processing that forces merchants to use analog as opposed to digital tools.
But what makes it so complicated? Let’s look at the typical stages a B2B payment has to go through before it’s complete. For this example, we’ll look at a typical transaction conducted between a store and its supplier:
1. The store submits an order to the supplier.
2. The supplier receives the order and generates an invoice.
3. The store gets in touch with the supplier to verify the details of the invoice.
4. If the invoice is accepted, then the store sends a check to the supplier. If the invoice is declined, however, the process has to start all over again.
5. The delivered check is submitted to the bank.
The actual stages of the process may seem rather straightforward, but the true complexity of B2B credit card processing lies in its timeline and methods. Between invoice generation, subsequent confirmation and the payment processing itself, it can take anywhere from one to three months, which also depends on the acceptance or decline of the invoice.
The methods used aren’t really helping to speed things up either. Although some elements of B2B payment processing have experienced partial innovation, it only made the process more fragmented by forcing analog and digital elements to coexist in the same ecosystem, which in itself is problematic.
In order to streamline the entire process, each step needs to be digitalized. Although there are solutions available that can help accomplish this goal, many of them are simply unaffordable for small and medium-sized businesses. Considering that these businesses make up the backbone of the U.S. economy, this unfortunate fact alone could be responsible for B2B credit card processing falling behind its B2B and C2C counterparts.
Good news is that fast and simple doesn’t always have to be expensive — see if our B2B credit card processing solutions are right for your business.