Challenges of B2B Payments and How FinTech Revolutionizes the Process


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All businesses, irrespective of size, type, and industry, have ways of streamlining and expediting their B2B payment processing. However, there are various challenges that businesses have to witness while gathering these payments from their clients.

There are various recurring payment issues related to payment delays and the processing various payment forms. As B2B businesses are complex, multiple factors hinder the payment processes. These issues are related to embracing the dated accounts receivable approach and other tedious processes that are an inherent part of the approach. Mostly B2B payments are one-time or recurring based on the business alliance between the buyer and the vendor. Currently, a few enterprises offer their client to pay in installments to promote pre-payment to minimize returns and cancellations.

B2B payments have become more intricate and complex in today’s business landscape compared to B2C transactions. B2B payments require more time to get approved and settled than B2C transactions. As multiple decision makers and authorities are involved in accomplishing one B2B payment, it has become a necessity for businesses to have a simplified process to create invoices and gather the payments within the required timeframe. Various business leaders are exploring opportunities to leverage FinTech solutions to streamline, expedite and enhance their B2B payment process.

3 Key Challenges Businesses have to Witness While Processing B2B Payments


A considerable amount of transactions with complex paper-based interactions between businesses can lead to fraudulent activities. As B2B businesses have various decision-makers and resources involved in the process, it can lead to the frauds being undetected for a long-time. Companies with traditional processes to complete a payment transaction might have significant exposure to risks and threats. One of the most significant types of B2B fraud witnesses widely is Business Email Compromise (BEC), wherein the fraudsters compromise the email systems to manipulate the invoices and reroute the payment to their accounts instead of the company. The recent pandemic that surged the world has led to intensifying fraud. Businesses that leverage real-time prices might have to witness Authorized Push Payments (APP) fraud. Decision-makers must evaluate their vendors and partners’ financial reliability before forming a business alliance. Enterprises that want to reduce the B2B payments frauds need to gather credit information and past financial performances of the new business accounts to ensure they can pay on time.

Disparate Systems

While gathering B2B payments, businesses might have to overcome various challenges while integrating with other systems and tools. Moreover, the challenges will also depend on the type of business partners and their payment preferences. Disparate Systems and their complexities make it challenging for Businesses to reconcile B2B payments.

High Pricing and Processing Delays

B2B payments usually have massive amounts transferred in a single transaction and must be made at frequent intervals. This leads to high charges for processing B2B payments, making it difficult to process them. Moreover, B2B payments are challenging to monitor and keep track of, leading to a tremendous amount of delayed payments.

How FinTech Revolutionizes B2B Payments

 Most B2B enterprises are exploring opportunities to migrate their manual processes to automated processes to minimize costs, increase speed and reduce errors. B2B businesses are looking out for AI-based Robotic Process Automation (RPA) to automate their manual operations processes like reading invoices and adding more information to their payments systems. A few businesses are leveraging Credit-as-a-Service (CaaS) solutions to simplify payment and credit management systems. It is one of the most effective ways to digitize B2B payments and overcome most accounts receivable challenges.

Another aspect that can be tremendously benefited from FinTech is billing. As B2B businesses migrate to a subscription-based payment model, decision-makers can leverage advanced Fintech tools to rescue costs and simplify payments.

An intelligent subscription management system helps businesses to manage the bills from a centralized system.

This approach is one of the most effective ways to ensure a seamless B2B bill payment without making mistakes.

Leverage Blockchain in B2B Payments

Modern supply chains are complex, and the intricacies are tremendously increasing. Business leaders are exploring Blockchain to simplify and improve transparency throughout their B2B payments process. Blockchain is the best way to improve accuracy and clarity because it helps businesses create and maintain a record for all transactions, from monitoring orders, raw material procurement, logistics, production, quality checks, and return processes for damaged products. This technology is one of the most disruptive ways to track and monitor every part of production and finances in real-time.

Businesses can leverage the capability of Blockchain to create smart contracts that offer the power to execute instructions depending on predefined parameters set without any need for human intervention. Moreover, the inevitable capability of Blockchain makes it an even better candidate for minimizing fraud in B2B payments. Businesses can utilize Blockchain to monitor each stage of their supply chain and ensure all the payments are tracked and executed as per the smart contracts. Smart contracts are one of the most effective ways to release the amount once the predefined parameters are met.

Also Read: Strategies to Modernize the FinTech stack

Cross-border B2B and Payment Orchestration Platform (POP)

B2B payments can be streamlined using a cross-border B2B and payment orchestration platform. First, select a payment orchestration platform that offers cross-border B2B payment services. It is crucial for businesses to look out for secure platforms, have a good reputation, and provide competitive rates. Furthermore, Integrate the payment orchestration platform with the enterprise resource planning (ERP), accounting, and other relevant systems integrated into the IT infrastructure to ensure smooth, automated payment processes.

Decision-makers need to establish payment methods for the suppliers and customers. They can consider crucial factors like the geographic location of the partners, local regulations, and the payment methods they prefer. By leveraging a cross-border B2B and payment orchestration platform, businesses can streamline the payment process, reduce the risk of errors and fraud, and improve cash flow management. It can also help enterprises save time, reduce costs, and improve relationships with current suppliers and customers.

FinTech has tremendous capabilities to streamline business processes and expedite B2B payments. Business leaders must explore opportunities to leverage the best Fintech tools to simplify their B2B payment processes.

Nikhil Sonawane
Nikhil Sonawane
Nikhil Sonawane is a Tech Journalist with TalkCMO. He has 4+ years of technical expertise in drafting content strategies for MarTech, Marketing Automation, and Customer Relationship Management (CRM). His Commitment to ongoing learning and improvement helps him to deliver thought-provoking insights and analysis on complex technologies and tools that are revolutionizing modern enterprises. He brings his eye for editorial detail and keen sense of language skills to every article he writes. If he is not working, he will be found on treks, walking in forests, or swimming in the ocean.


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