Four considerations for merchants when embedding B2B payments

By Brandon Spear, CEO, TreviPay

Companies that provide B2B goods and services are modernising and taking their products online to keep up with the rapidly changing shift to digital. Embedded payments is one solution that these businesses can consider so that the financial services aspect of the transaction virtually disappears into the background of the customer experience.

Maybe the most notable example of embedded payments is offered by Uber – a seamless interaction that eliminates the inconvenience of manual payment before the customer exits the cab. B2C embedded payments have become the norm as sellers strive to reduce the time and effort buyers need to invest in transactions. Ikea’s purchase of a 49% stake in Ikano Bank, for example, signals an intent to embed more consumer banking services in sales to consumers. Now, more than ever, B2B buyers who tend to require a variety of payment options, including trade credit, are looking for the same ease and convenience when they transact.

“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.”

These disruptions intensify the competition to attract and retain B2B customers. Future-ready and resilient payments strategies can 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. Here are four things to consider when integrating an embedded payments solution:

• B2B customers want a B2C ecommerce experience. Meeting the expectations of the digital-first buyer is critical. B2B payments are much more complex than the transactions and processes that enable B2C embedded payments. B2C payments typically take place between a single stakeholder (a consumer) using a single payment method (a debit or credit card). It’s normal that a B2B transaction may involve multiple stakeholders (the purchaser, the budget owner, the procurement group, the accounts payable team and others) and numerous different payment options (trade credit, purchasing cards, and credit cards, among others). Every B2B stakeholder has a unique set of needs and preferences that must be met, 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, like PO numbers, to invoices and support integrations into Procure-to-Pay and Enterprise Resource Planning platforms. While embedded payments require a significant amount of behind-the-scenes orchestration, the speed and ease in which transactions take place can be transformational.
• Instant decisioning and credit help attract B2B buyers and build loyalty in the long run. The most effective embedded payments experiences make a company easier to do business with. This is because it lets the buyer interact, and transact, on their preferred terms. It’s well-known that business customers prefer to purchase using trade credit and spend more and more frequently with a business when they have a dedicated financial relationship and credit line. This is advantageous for businesses because customers know they can easily purchase from a merchant when they need to re-stock. But the credit issuance must be quick and nearly instantaneous to keep buyers on the hook. In the move to digital-first interactions, instant decisioning is critical to the sales process.
• Ensure A/R is included in your embedded finance solution. A key part of the embedded payment evolution for B2B merchants is extending a completely digital and automated onboarding experience to accounts receivable. 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 — meaning only 37% of a sales team’s time is bringing in new business. By eliminating the need to email forms, wait days for credit decisions, and perform manual bank reconciliations, merchants can experience great time and cost savings.
• 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.

B2B merchants must be closely in tune with the revolutionary changes to customer experience, engagement and convenience embraced by the rising digital generation and accelerated by COVID-19. B2B customers are also consumers after all, and they now have the same heightened expectations for seamless, invisible payments in their B2B purchasing that they have come to expect in B2C transacting.  B2B merchants must now make it as easy as possible for customers to transact with their brand by embracing the value an embedded payments capability delivers.

By Brandon Spear, CEO, TreviPay

Companies that provide B2B goods and services are modernising and taking their products online to keep up with the rapidly changing shift to digital. Embedded payments is one solution that these businesses can consider so that the financial services aspect of the transaction virtually disappears into the background of the customer experience.

Maybe the most notable example of embedded payments is offered by Uber – a seamless interaction that eliminates the inconvenience of manual payment before the customer exits the cab. B2C embedded payments have become the norm as sellers strive to reduce the time and effort buyers need to invest in transactions. Ikea’s purchase of a 49% stake in Ikano Bank, for example, signals an intent to embed more consumer banking services in sales to consumers. Now, more than ever, B2B buyers who tend to require a variety of payment options, including trade credit, are looking for the same ease and convenience when they transact.

“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.”

These disruptions intensify the competition to attract and retain B2B customers. Future-ready and resilient payments strategies can 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. Here are four things to consider when integrating an embedded payments solution:

• B2B customers want a B2C ecommerce experience. Meeting the expectations of the digital-first buyer is critical. B2B payments are much more complex than the transactions and processes that enable B2C embedded payments. B2C payments typically take place between a single stakeholder (a consumer) using a single payment method (a debit or credit card). It’s normal that a B2B transaction may involve multiple stakeholders (the purchaser, the budget owner, the procurement group, the accounts payable team and others) and numerous different payment options (trade credit, purchasing cards, and credit cards, among others). Every B2B stakeholder has a unique set of needs and preferences that must be met, 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, like PO numbers, to invoices and support integrations into Procure-to-Pay and Enterprise Resource Planning platforms. While embedded payments require a significant amount of behind-the-scenes orchestration, the speed and ease in which transactions take place can be transformational.
• Instant decisioning and credit help attract B2B buyers and build loyalty in the long run. The most effective embedded payments experiences make a company easier to do business with. This is because it lets the buyer interact, and transact, on their preferred terms. It’s well-known that business customers prefer to purchase using trade credit and spend more and more frequently with a business when they have a dedicated financial relationship and credit line. This is advantageous for businesses because customers know they can easily purchase from a merchant when they need to re-stock. But the credit issuance must be quick and nearly instantaneous to keep buyers on the hook. In the move to digital-first interactions, instant decisioning is critical to the sales process.
• Ensure A/R is included in your embedded finance solution. A key part of the embedded payment evolution for B2B merchants is extending a completely digital and automated onboarding experience to accounts receivable. 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 — meaning only 37% of a sales team’s time is bringing in new business. By eliminating the need to email forms, wait days for credit decisions, and perform manual bank reconciliations, merchants can experience great time and cost savings.
• 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.

B2B merchants must be closely in tune with the revolutionary changes to customer experience, engagement and convenience embraced by the rising digital generation and accelerated by COVID-19. B2B customers are also consumers after all, and they now have the same heightened expectations for seamless, invisible payments in their B2B purchasing that they have come to expect in B2C transacting.  B2B merchants must now make it as easy as possible for customers to transact with their brand by embracing the value an embedded payments capability delivers.