Four Primary Differences Between B2B and B2C Payments

We all know B2B and B2C payments are very different. However, are you aware of those differences when it comes to e-commerce? Are you certain that your choice of B2B payment companies is a positive element of customer experience? Here, we look at the four primary differences you should bear in mind.

Difference 1 – Average Basket Value

The top difference between B2C and B2B payments lies in the average value of their baskets. In a B2C transaction, the basket average value will be low. It could range from just a few dollars to hundreds of dollars. However, it will almost never reach a significant sum.

Meanwhile, in a B2B transaction, the basket average value will usually be high. It could range from hundreds of dollars up to thousands of dollars or higher.

It is this difference between the basket values that leads to more particularities. It’s relatively easy to pay a $100 straight away. However, when it comes to paying thousands of dollars, the operation becomes more complex. It also leads to more differences, including different payment terms and methods.

Difference 2 – Payment Methods

This leads us to the second key difference – payment methods. In a B2C e-commerce transaction, electronic methods are generally used. They are also instantly received. When a person uses a card to pay digitally, its authorization will be in real time. This ensures there are enough funds in the purchaser’s account. The funds are instantly debited and transferred virtually to the account of the vendor.

In B2B purchases, however, the purchases are bigger. This means that instant payment isn’t always possible. Usually, people will not use asynchronous payment options. Direct debits, bank transfers, and paper checks are still common. They involve no authorization in real time. Therefore, there is a risk of checks bouncing or payments not being authorized. Delays can occur and the cash flow compromised.

Difference 3 – Recurrent Purchases

In a B2B business, the customer base will not be as fragmented as that of a B2C company. E-commerce, however, reaches previously inaccessible customers and expands the catchment area of sales. Yet, B2B customers are more likely to be recurrent purchasers. They are running a business and need regular supplies. This means they could be buying a few times every week. This is in direct contrast to B2C businesses that may only sell to a single customer infrequently. This means having a recurring invoicing and payment system is more important for B2B businesses. The best B2B payments companies can accommodate this need.

Difference 4 – Payment Terms

B2B transactions often have 30-day payment terms. This system is ingrained, and buyers are unwilling to make payments in advance for their orders. It isn’t possible, therefore, to have a B2B e-commerce company that is solely based on prepayment. B2C transactions, meanwhile, are almost always made upfront, with goods and services being received afterward.

It is key to have a B2B payment solution that can accommodate these needs and provide consistent customer experience. It is vital to be able to offer an array of suitable payment methods that appeal to B2B customers. Web portals that offer credit and debit card payments, as well as ACH payments, are most convenient. This will reassure B2B customers as to the reliability of their purchases. They will also enjoy the convenience of being able to pay with their preferred method of payment. Meanwhile, B2B vendors enjoy the benefit of faster cash flow and reduced effort.

When choosing between the different B2B payments companies, reliability and compliance are key. BillingTree’s advanced solutions are the ideal choice. Convenient, cost-effective, and fully compliant, BillingTree’s payment solutions perfectly suit the needs of B2B businesses.