What Are the Most Common B2B Payment Methods?

February 10, 2021

According to McKinsey research, COVID-19 has permanently altered business-to-business (B2B) payment methods. Their findings indicate that the future of B2B payments will skew more heavily toward online, digital platforms. But we’re not entirely digital yet; as of right now, there’s still a variety of B2B payment options available to businesses, both online and off.

This article will explain everything you need to know about B2B payments, as well as the pros and cons of the most common methods, including:

  • Cash payments
  • Paper checks 
  • Debit cards
  • Bank and non-bank wire transfers
  • Automated clearing house (ACH) payments
  • Independent payment platforms (PayPal, Cash App, etc.)
  • Smart corporate cards

Cash Payments

The oldest and perhaps most straightforward option available for B2B and all business spend is simple cash payments. Years ago, the expression “cash is king” held more value than it does today. Cash payments were more common, and the benefits of paying cash were more pronounced in a world where there were fewer virtual options available. 

That said, cash is still useful in many cases. Cash has its benefits in cost reduction, as paying with cash typically doesn’t cost anything to process. Cash payments are also typically quicker and easier to process, offering efficiency. There are some situations in which only cash is accepted, making it necessary to use. Similarly, paying with cash can open up deals with certain clients and strategic partners.

However, cash payments can be more difficult to track, making budgeting and accounting more difficult in the long term. Plus, they can negatively impact cash flow, since money that is spent is immediately removed from your balances, rather than at your discretion (as with credit options).

Paper Checks 

Another payment option that was far more common years ago is the paper check. When coordinating payments to clients, checks are typically not one of the best choices, since they’re slow to process.

The main trade off for speed is security. Checks offer more fraud protection than faster payment methods, making them ideal for B2B payments in which speed is less important.

Plus, there are several niche benefits to consider with paper checks, including:

  • A concrete paper trail that’s easier to follow than cash or digital options
  • Flexibility in scheduling, as checks can be deposited at your leisure
  • No need for a bank account to cash checks, for any party

Debit Cards

Similar to cash and checks, debit cards pull directly from your business checking account. In essence, debit cards can be thought of as digital cash payments, making them the half-way point between cash and wire or ACH payments, which we’ll detail below.

Bank and Non-bank Wire Transfers

One of the simplest, quickest, and most widely-used forms of digital payments, wire transfers are the standard of large B2B payment methods, particularly international payments. Wires are extremely flexible, as they can be initiated from a bank or several other non-bank institutions, such as Western Union or MoneyGram. All you need for a wire is your recipient’s information.

If you are initiating a “bank wire,” the information required amounts to the recipient’s name and bank account, including account number and routing number. For a non-bank wire, you’ll need the recipient’s name, address, and a phone number. Some wires can be processed in minutes or hours, especially for domestic transfers, but the process can take up to a few days in some cases.

Another factor to consider for wire transfers is cost. A wire transfer is seldom free, as the sender almost always has to pay a fee to initiate the process, and the recipient may have to pay, as well.

Wires are secure in and of themselves, but one element that can lead to fraud or manipulation is the fact that wires cannot be refunded or cancelled once initiated. For these reasons, wires are best suited for infrequent rather than recurring or bulk business payments that a small business owner needs to make.

Automated Clearing House (ACH) Payments

Another common form of B2B digital payment involves the automated clearing house network. Overseen by the regulatory body Nacha, ACH payments function similar to checks, with excellent security. ACH is often used for payroll services, such as “direct deposit.”

ACH transfers and wire transfers are quite similar, and in some cases, the terminology is used interchangeably. However, there are some important differences between the two:

  • ACH transactions tend to be significantly cheaper than wires, often free.
  • ACH typically takes longer to process than wire transfers.
  • Unlike wires, ACH transactions can be refunded or cancelled by either party.
  • Whereas wires can be international, ACH is limited to domestic transactions.

These factors make ACH an ideal baseline method for recurring payments or bulk B2B transactions that occur domestically. Many businesses use ACH for a majority of their regular transactions, opting for wires, checks, cash, or other methods for special, niche, or infrequent transactions.

Independent Payment Platforms & Fintech

Similar to both ACH and wire payments—and commonly referred to as payment-based social media—other options available for B2B payments are financial technology (fintech) platforms. Some of the most popular platforms for a small business owner includes:

  • PayPal – The industry standard for over two decades, PayPal is a B2B payment platform built specifically for business transactions that doubles as a peer-to-peer (P2P) payment network.

  • Cash App – A part of Square’s suite of business services, this payment option emphasizes privacy, security, and accessible business functionality rather than the social element.

  • Google Pay – This B2b payment solution offered by Alphabet prioritizes ease of use and integration with other G-suite applications and services, such as gmail.

Advantages of these platforms come in the form of security and customer service guaranteed by their administrators. There is also the social aspect, where users can utilize integrated marketing, comments, and direct messaging alongside transactions. These attractive features apart from purely transactional ones are seen as a disrupter to major banks and financial institutions’ platforms.

However, a major consideration here is cost: These platforms can be among the most expensive of any B2B options, often charging a flat fee or percentage per transaction.

Power Your B2B Payments with Ramp

Ramp’s smart corporate card is a unique solution for your B2B expenses. In addition to the benefits detailed above, Ramp compounds flexibility and ease with features like unlimited cards for personalized spending limits and powerful insights to control expenses.

Ramp is designed to help businesses save, with unlimited flat cash back and automatic cost-saving opportunities. Plus, Ramp’s automated spend management platform can match receipts, log transactions in your general ledger, integrate with top platforms like Slack, Quickbooks, and Sage Intacct, and so much more.

Use Ramp to power your B2B transactions and all other expenses, and see how much you can save.



McKinsey & Company

McKinsey & Company




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