Embedded Payments Emerge in B2B
Simply put, embedded payments refer to a payment processing functionality that is included within a software solution. This functionality allows merchants to accept payments within their software which is “built-in” instead of “bolted-on”. This solution not only helps merchants provide their customers with a more streamlined user experience, but also automates accounting practices.
A prominent example of this type of payment is Uber, a seamless transaction that requires little work on the consumer’s part. B2C payments have taken off from there, and now B2B buyers who require a variety of payment options are beginning to expect that their purchases resemble the ease and convenience that comes with an Uber payment.
“Three years of consumer behavior change was squeezed into one year in 2020,” wrote Forrester Principal Analyst Jay McBain. “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.”
Four Considerations of Embedded Payments
Considering this shift in behavior, users will soon expect B2B payments to be invisible. To this, merchants will need to consider these four important considerations:
1. Merchants Who Make B2B Payments Feel Like B2C Will Win
Merchants who want to offer this experience will meet the expectations of their buyers but need to understand it isn’t as easy as a B2C embedded payment that uses a single consumer and one credit card.
B2B payments are more complex and involve multiple stakeholders (with unique needs and preferences) and numerous transaction types. Smart B2B embedded payment solutions should help merchants improve cashflow by allowing buyers to receive invoices daily, weekly, or monthly and make payments on terms that they control. It is also critical to allow for ways to add data, like PO numbers, to invoices and support integrations into ERP platforms. The speed and ease of these embedded payments should mask the significant number of transactional systems that must be installed and orchestrated behind the scenes.
2. AR/AP Automation is Major Player in Finance Strategy
A key part of the embedded payments evolution for B2B merchants is extending to accounts receivable with a 100 percent digital experience and automated onboarding. This can deliver significant time and cost-savings to the merchant – eliminating the need to email forms, wait days for credit decisions, or spend human time on procedures such as creating PDF invoices or performing manual bank reconciliations.
3. Payments Build Loyalty
The most effective embedded payments experiences make a company easier to do business with by letting the buyer interact on their preferred terms. Business customers prefer to purchase on terms and spend more frequently when they have a dedicated financial relationship and credit line with a business. The advantage over competition is significant when customers know they can painlessly purchase from a merchant once they’re ready for more stock.
4. Protect Against Fraud
As more transactions go digital, there is a growing risk of digital fraud. When implementing an embedded payments strategy, it is important to work with a partner who can reliably enhance the relationship between buyers and sellers by providing sophisticated fraud detection processes.
Learn More About B2B Payments:
Contact us online or call 1-800-621-8931.
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