Why It’s Critical to Modernize B2B Payments; Buy Now, Pay Later

Buy Now, Pay Later in B2B

Business-to-business (B2B) payments are the lifeblood of the modern economy, but navigating them is far from simple. Unlike easy, consumer-to-business (B2C) purchases, business-to-business (B2B) payments are riddled with complexity, slow processes, and costly inefficiencies. US businesses face unique challenges, from managing large, recurring transactions to dealing with sensitive financial data and antiquated payment systems. Understanding these hurdles- and knowing how to overcome them—is essential for staying competitive.

Why Business-to-business (B2B) Payments Are So Complex

Consumer transactions are typically quick and simple, involving instant payments and minimal information exchange. By contrast, business-to-business (B2B) payments often require extended deal cycles and multiple levels of sign-off. Transactions are generally larger and may involve recurring payments to suppliers or service providers. Additionally, B2B payments carry more data, such as tax information, invoice numbers, and purchase orders, all necessary for accounting accuracy and traceability.

Core Challenges in Traditional B2B Payments

Most traditional business-to-business (B2B) payments rely on slow, manual processes like paper checks or non-automated bank transfers. These outdated methods create friction for buyers and drive up costs for sellers. The issues ripple throughout an organization: high invoice processing costs, limited visibility, lengthy payment cycles, and data silos are all too common. With manual processes, errors and delays multiply, and both transparency and efficiency are lost.

Security Concerns and Fraud Risks

The sheer volume and value of business-to-business (B2B) payments make businesses attractive targets for payment fraud. Paper-based payments are especially susceptible—checks can be stolen or manipulated with relative ease. Even digital payment methods are not immune, but the risks associated with traditional systems are far greater. According to the Association for Financial Professionals (AFP), checks remain the payment method most impacted by fraud, highlighting the urgent need to modernize.

Lack of Collaboration and Integration Issues

Traditional payment systems often operate in silos, limiting collaboration and information flow between partners, suppliers, and customers. Manual data entry and reconciliation take up valuable employee time and cause frequent mistakes. Poor integration between payment platforms and internal systems means fewer flexible options, resulting in slower and less reliable transactions. Streamlining business-to-business (B2B) payments with connected, automated systems can unlock better collaboration and faster results for US businesses.

Cross-Border and International Payment Complexities

Cross-border B2B payments add another layer of difficulty. International transactions can involve fluctuating exchange rates, various compliance regulations, and hidden intermediary bank fees. These payments are usually even slower and less transparent, making it hard for businesses to predict when funds will arrive or what fees will be incurred. Managing international B2B payments with legacy systems can hinder growth and erode global relationships.

Why It’s Critical to Modernize B2B Payments

Failing to address the challenges of outdated business-to-business (B2B) payments can directly impact your company’s bottom line. The AFP reports that issuing a check costs businesses between $2.01 and $4.00, while sending an ACH payment costs as little as 26 to 50 cents. On top of direct expenses, manual processes produce hidden costs: wasted time, delayed access to working capital, higher fraud risk, and strained business partnerships. In a fast-evolving and competitive market, improving your B2B payment infrastructure is not optional—it’s vital for protecting profits and ensuring long-term growth.

Conclusion

Business-to-business (B2B) payments are fraught with complexity, security risks, and inefficiencies that drain resources and hinder growth. Traditional payment methods slow down transactions, increase costs, and expose companies to fraud and integration issues—challenges that only intensify with cross-border payments. Modernizing B2B payment systems is essential for streamlining operations, improving visibility, reducing risks, and staying competitive in a fast-evolving market. Investing in digital solutions is no longer optional—it's vital for every business looking to thrive.

About Two

Two revolutionises B2B payments by making net-term selling as effortless as card payments. With offices across Oslo, Stockholm, Glasgow, London and New York, and partnerships with leading financial institutions like Santander Banking, Allianz Trade, ABN Amro and Visa, Two is the trusted B2B payment enabler for companies globally.

Want to learn how Two can transform your B2B payment experience? Get in touch with our team to discuss your specific needs.

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