Marketplaces are all the rage these days. One application that seems particularly promising is B2B marketplaces; trade startups like Represent (a company that was recently acquired by Google) are particularly hot right now.
The success of these kinds of platforms often depends on how well merchants and consumers take to one another, but oftentimes sellers need to get their products in front of potential customers who aren't looking for them; this requires compelling content that attracts visitors without stepping too far into their territory.
In this article, you’ll see some of the worlds most popular and thriving business to business eCommerce payment methods which you can use to decide on the best system for your online marketplace.
Payment options for B2B marketplaces
When it comes to payment options, marketplaces are spoiled for choice. We’ll take a look at the most popular methods employed by prominent platforms.
1. Credit/debit cards
Credit and Debit cards are a tried-and-true method of paying for business transactions. A buyer uses a card during checkout by entering the card number, expiration date, and CVV code.
Credit cards work well all around the world, even in countries with limited banking infrastructures. In addition to this convenience, they're quite secure because it's possible to track spending with bank statements. You'll want to consider that there can be limitations on large purchases, but hopefully, your provider will be flexible about shifting credit from one card to another when maxing out one would keep you from fulfilling an order before its deadline.
The majority of business to business platforms accept debit and credit cards. This includes both Amazon Business and Upwork. Zageno does require a new account owner's first order to be placed using a credit card, but this is relatively rare among other similar marketplaces.
2. ACH payments
Automated Clearing House (ACH) is a website for electronic financial transactions that can be used to remit money to any United States or international bank account. When you use an ACH payment rather than a check, the transaction cannot be stopped once it has been set in motion. ACH takes money from one source and puts it into another over multiple payment cycles until the full amount of the payment has been received by the intended recipient.
This method is good for recurring B2B e-commerce payments as it’s convenient and more cost-effective than wire transfers. ACH, however, is not the fastest method and ACH transfers can take several days. Besides that, when opting for this payment option – buyers – should – remember – the – cutoff – time – for - ACH - payments. This is a point in the day before which payments must be submitted to enter the clearing system.
Not many e-commerce marketplaces use ACH payments. Among those favouring its benefits is the Upwork freelancing platform.
3. Wire transfers
Wire transfers are very secure and reliable, which is one of the reasons why our marketplace prefers them. But they can be expensive for both senders and receivers because banks take their small cut of the deal. They're not the safest option for low-value payments; other methods like ACH (Automated Clearing House) or SWYFT (Simplified Windows Wire) are sometimes better suited to smaller sums. This method is widely used between large companies, although it’s not very fast as a batch system is used (as opposed to ACH transfers).
Some marketplaces like Zageno prefer wire transfers. If you're using other platforms like Alibaba and Packhelp, a SWIFT payment might be an option for you.
4. Digital payment platforms
For online business transactions, there are several choices of payment platforms that enable money transfers between different companies worldwide. These include Venmo, PayPal, Payoneer, Dwolla and Google Pay. All transactions are verified through bank accounts - not surprisingly since they're connected to them (some digital payment systems do not work with bank accounts). This method is reliable and accepted by all the major online marketplaces around the world for its cost-effectiveness and fast speeds.
However, some of them are only available on specific platforms, like Venmo for mobile devices. The fees can also be high - some online payment marketplaces charge as much as 3%. Some digital payments marketplaces include GorillaSpace and CargoPay.
As eCommerce business models become more disruptive, cryptocurrencies are becoming the currency of the future. Digital currencies are young, but others have been boasting how they don’t have to deal with cash or credit cards when it comes to payment processing. This is a huge selling point because even though transactions over cryptocurrency may be approved faster than a bank transfer, taking a day or longer for one’s account to update after the purchase means that customers could be left without their products for a while.
Bitcoin, Ethereum, and Litecoin are the most common cryptocurrencies. They may help speed up payment processing or be used in micropayments where traditional solutions are too costly. While cryptocurrencies do provide a level of anonymity for their users, they can still be tracked through blockchain analysis.
6. Third-party financing
Third-party financing is the most common form of purchasing in the world. Unfortunately, there are a lot of myths surrounding this method of payment. It’s not a method for transferring money but rather the way that payments are made. As entrepreneurs looking to start their B2B marketplace(s), it’s important to understand that allowing your customers to pay overtime is essential since it gives them flexibility with their purchases and stimulates trade on your marketplace through credit trading.
The reason why companies choose this payment option is that it’s usually smooth and transparent. Often there are no transaction fees, but since it’s a loan, a marketplace charges interest.
Amazon Business Line of Credit, for example, works as a pay-in-full line of credit underwritten by Synchrony Bank with 55-day terms and no annual fee. Alibaba also has what you need in the form of their business lending scheme Alibaba Pay Later.
Payment options popular B2B marketplaces use
Now, let’s list some popular eCommerce payment methods that a multitude of marketplaces offer. Note that this list is not exhaustive and may not contain all possible payment methods a particular marketplace provides.
Why diversity matters
As you can see, there’s no one-size-fits-all method for this subject. The obvious solution is to provide businesses with options that are both effective and versatile since the goal is to make the process as efficient as possible. This may include offering businesses with a variety of payment methods on your online store - depending on their needs!
According to Market Research, offering diverse B2B eCommerce payment methods is a strong trend in B2B eCommerce. It speeds up the purchase process and lowers shopping cart abandonment rates.
Marketers and eCommerce leaders say B2B marketplaces will be the future of e-commerce integrations. For this to happen, it’s vital to provide platform users with a variety of swift, convenient payment options which may include credit cards, PayPal wire transfers, ACH transfers and even crypto payments.
This ultimately will help both suppliers and customers by providing customized payment offerings and streamlining them as well; however; you also need to make sure that you keep these up to date without delay because as technology evolves so must the services that accompany it.