Getting started with B2B payments: What does your marketplace need?

Understanding your payment requirements is important step before choosing your payment solution provider. Assessing what you need the most and what kind of aspects are crucial for your business can save you a lot of time. Focusing on what your customers expect from you, analyzing the trends in your industry and insights about your own B2B marketplace can help you to pick the most suitable payment service provider.

That's why in this article we are going to focus on important dimensions when assessing your payment needs and which factors are crucial in choosing the right setup.

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Step 1: Identify Your Customers’ Preferences:

The first step is to identify the types of payment methods your target customers prefer to use. When customers can pay using their preferred methods, they are more likely to complete transactions and have a positive experience on your B2B marketplace. Check if your customers prefer to pay with credit cards, direct debit, bank transfers or other options. You can also research on the popular payments methods among different customers segments or different regions. According to Statista, younger customers is Germany prefer to pay more with debit cards (38%) compared to older customers (23%). Since Gen Z has entered B2B working environment, their preferred payment methods are becoming popular in the B2B transactions.

When analyzing preferred payment methods, it is also crucial to determine your target market and the currencies you need to support. In a survey made in 2017, 39% of the respondents said that their corporation made B2B payments in six or more currencies. If you want to operate internationally, you need to offer the currencies your target customers prefer to use.

Last but not least, B2B customers often prefer flexible payment options to align with their cash flow. Offering choices like net terms, installment plans, or BNPL can be beneficial. The market share of BNPL services in domestic e-commerce payments in both Sweden and Germany was around ten times higher than the same market share in global e-commerce payments in 2022; so check if your target customer prefers to pay with specific BNPL payment options and evaluate if your payment solution can provide a diverse set of these optİons.

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Step 2: Check the Common Practices in your Industry:

Continue with analyzing payment trends and standards within your industry and check if there are any specific requirements or regulations that apply to your target customers.  A worldwide survey from 2020 revealed that most companies offer payment through credit card for B2B purchases, while 63 percent of surveyed professionals state their companies integrated mobile wallets in their e-commerce. Additionally, a significant amount (69.9%) of companies provide delayed payment terms. In this case, business customers could pay 30, 60, or 90 days after the actual purchase. If many companies in your industry has specific offers, you need to provide same kind of options to keep up with the high competition.

The market size of the new fintech trend embedded finance has grown rapidly in recent years, despite being such a young concept. It refers to financial services or products offered by non-financial providers, such as your B2B marketplace. With embedded finance, your B2B Marketplace can offer its users financial solutions such as Net Terms, BNPL, invoice factoring and more. According to Statista, the widespread adoption of embedded finance has disrupted the role of traditional banks, and many non-financial businesses are planning to offer embedded finance services within a short future. The numbers don’t lie; according to Allied Market Research, the global embedded finance market was valued at €61.29 billion in 2022, and is projected to reach €571.5 billion by 2032, with a 25.4% compound annual growth rate. As a B2B Marketplace, make sure to evaluate your options to offer your customers embedded financing options.

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Step 3: Determine Typical Transaction Volume and Frequency:

Assessing the expected transaction volume and frequency in your B2B marketplace is crucial for determining the most suitable payment methods. Different payment methods come with various transaction fees and processing costs, which can significantly impact your business's profitability, especially in high-volume scenarios.

If your B2B Marketplace mostly has high-volume transactions, you should consider payment methods with lower transaction fees to minimize costs and increase overall profitability. SEPA and bank transfers are often more cost-effective than credit cards for high-value transactions due to their lower processing fees.

If your B2B Marketplace mainly has low-volume transactions, the focus might be more on offering diverse payment options to cater to the preferences of different customers.

Credit cards can be suitable for low-value transactions due to their convenience and widespread use among buyers. Providing e-wallet options such as Apple Pay or payment gateways that support multiple payment methods can improve customer satisfaction for occasional or small-scale purchases.

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Step 4: Identify Cross-Border Payment Needs:

If your B2B marketplace is operating internationally, consider the payment methods that are commonly used in different regions. Check what kind of payment solution provider you need in order to support multiple currencies and any additional requirements for cross-border transactions. Some payment solution providers allow businesses to transact in their local currencies, reducing currency conversion costs and providing transparency in pricing.

You can also consider offering real-time currency conversion options to your customers during checkout. This can help businesses see the exact amount they need to pay in their own currency. Always communicate any additional fees or charges related to cross-border transactions, such as currency conversion fees or international transfer fees.

Cross-border transactions may take longer to process due to international banking protocols. If you operate internationally, you need to choose payment solution providers that offer fast and reliable transaction processing to minimize delays.

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