Embedding B2B Payments: Four Key Considerations

In many areas, the boundaries between business and leisure are blurring.

For example, the desire for ‘bleisure’ (business combined with leisure) trips increased by 19% between 2022 – 2023 globally.

And formal office wear use has declined, too. Necktie sales more than halved between 1996 and 2014, and dropped by a further 8% in the following four years.

Embedded B2B payments are another sign that the B2B world is becoming more like the B2C one.

Embedded payments: A Reminder

Embedded payments are digital integrated payment methods that typically only require single-step authentication.

They aim to be swift and seamless. The quintessential example is the one-click ‘Buy Now’ buttons in online stores that finalize transactions. 

The opposite, non-embedded payment approaches, are those that require filling out comprehensive forms and/or redirecting users to different pages.

Examples of embedded payments

Business-to-consumer (B2C) embedded payments have become the norm as sellers strive to reduce the time and effort buyers need to invest in transactions.

One of the most well-known examples is offered by Uber. It provides a seamless interaction that eliminates the inconvenience of manual payment before the customer exits the cab.

And Ikea’s purchase of a 49% stake in Ikano Bank signals an intent to embed more consumer banking services in their sales processes.

Why embedded payments for B2B matter

In general, business-to-business (B2B) payment methods are becoming more like business-to-consumer (B2C) ones in some respects. 

This fits into the broader trend of B2B companies modernising by taking their products and services online.

Embedded payments for B2B customers contribute to the effectiveness of this ongoing digital shift. They make the financial services aspect of transactions virtually disappear into the background of the customer experience.

Advantages of embedded B2B payments

Higher conversion rates

Embedded payments simplify shopping, reduce frustration and customer defection.

Increased loyalty

They enhance customer experience and accommodate multiple preferred payment methods, retaining customers effectively.

Enhanced analytics

They offer valuable customer behavior data, enabling targeted marketing and sales strategies.

Improved brand perception

They signal capability and innovation, while implying payment security, fostering trust and loyalty.

Customers expect embedded B2B payments

B2B buyers who tend to require a variety of payment or financing options, including trade credit financing, are looking for easy and convenienct transactions.

“Three years of consumer behavior change was squeezed into one year in 2020. Consumers are now demanding online experiences, happily virtual, wanting seamless digital procurement and provisioning, and wanting everything at the click of a button. The delta between B2C buyers and B2B buyers has collapsed during the pandemic. It’s all about speed, convenience, and remote, whether the buyer is acquiring a Peloton or a software product.”

Forrester Principal Analyst Jay McBain

These disruptions intensify the competition to attract and retain B2B customers. Future-ready and resilient payments strategies help B2B sellers and marketplaces meet these expectations for a seamless experience. 

In the end, this helps companies to build loyalty with customers, enjoy cost savings, increased revenue potential, and better cashflow.

It’s only a matter of time before all customers across the B2B space will expect the payments process to be invisible. 

Embedded payments can enable that invisibility. However, building the capability requires significant work, technical expertise, and a firm grasp of all the costs that can arise.

Four considerations when integrating embedded B2B payments

One: B2B customers want a B2C eCommerce experience!

Meeting the expectations of digital-first buyers is critical.

To do this, you need to think through each step of the B2B buyer’s journey. Transactions are a big part of this.

B2B transactions are more complex than B2C ones. The latter typically take place between a single stakeholder (a consumer) using a single payment method (a debit or credit card). 

By contrast, it’s normal that a B2B transaction may involve multiple stakeholders, including: 

• The purchaser
• The budget owner
• The procurement group
• The accounts payable team 

And numerous different payment options, including:

• Trade credit
• Purchasing cards
• Credit cards
• Checks

Every B2B stakeholder has a unique set of needs and preferences. And each payment option comes with technological integrations that need to be managed. 

Smart B2B embedded payments should help the merchant improve cashflow by allowing buyers to receive invoices and make payments on terms that they control. 

It’s also critical to allow for ways to add data. This can include PO numbers and invoice processing systems. Supporting the integration of this into procure-to-pay and enterprise resource planning platforms also matters.

This all requires a significant amount of behind-the-scenes orchestration. But once completed, the transformational speed and ease of transactions will more than make up for the earlier effort.

Two: Instant decisioning and credit help attract B2B buyers and build loyalty in the long run 

The most effective embedded payments experiences make your company easier to do business with.

This is because it lets your buyer interact and transact on their preferred terms. Business customers prefer to purchase using trade credit and spend more frequently with businesses they have a dedicated financial relationship and credit line with. 

This benefits your business because your customers know they can easily purchase from you when they need to re-stock.

But the credit issuance must be quick and almost instantaneous to keep your buyers on the hook. In the move to digital-first interactions, instant decisioning is critical to the sales process.

Three: Ensure A/R is included in your embedded finance solution

In the B2B world, embedded finance services compliment embedded payments. 

For example, the background to B2B buy now pay later (BNPL) usage is different to the B2C version. 

For B2B customers, it is ultimately a future-oriented process based on increasing cashflow in order to increase profits. For B2C ones, future benefits are not the primary – or even periphery – focus.

A key part of the embedded B2B payment evolution is extending a completely digital and automated onboarding experience to accounts receivable (A/R) 

With the right support and back-office innovation, A/R teams can be fully equipped for the future of payments.

Research shows that the majority (63%) of salespeople’s time is focused on activities other than selling. This means only 37% of their time is bringing in new business. 

Eliminating the need to email forms, wait days for credit decisions, and perform manual bank reconciliations, merchants can experience great time and cost savings.

Four: Protect against business identity theft

With more transactions happening online, there is always a risk for identity theft and other forms of digital fraud. 

When implementing an embedded payments strategy, it is critical to work with a partner who can provide a sophisticated fraud detection process. 

Being able to maintain a strong track record for risk decision is important and can help enhance the relationship between buyers and sellers.

TreviPay’s embedded B2B payments solution

TreviPay’s tailored B2B payment software, including embedded payments, allows businesses of all sizes to offer real-time authorized invoicing options across all sales platforms. 

By leveraging our trade credit, buyers can buy more without draining their cashflow. We assure a seamless brand experience across user journeys and enable omnichannel purchases through eCommerce, marketplaces, offline, and in-store avenues.

Conclusion

The era of embedded payments in the B2B sector is here, following the path laid out by B2C markets. 

There’s a growing trend towards B2B digital transactions and a demand for seamless experiences.

B2B companies must adapt their strategies to accommodate the increasing need for quick, integrated payment solutions. 

To effectively incorporate these methods, businesses must consider factors such as meeting the buyer’s unique preferences, facilitating immediate credit decisions, and incorporating accounts receivable into the financial solution. 

The transformation might require considerable effort and technical expertise, but the potential rewards—improved cash flow, increased loyalty, cost savings, and boosted revenues—make it a worthwhile endeavor.

It’s anticipated that embedded payments will soon become the new norm, further blending the lines between B2B and B2C transactions, reflecting a global shift toward digital convenience. 

This signals an exciting time for the B2B landscape, as it continues to evolve and adapt to meet the modern demands of business transactions.

Another article on this topic was originally published on Global Banking & Finance Review.