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B2B Payments: How they are different from B2C

Blog
9th July 2018

B2C and B2B payments are different. But what are these differences in terms of e-commerce, and how can we be sure that B2B payment becomes a positive component of customer experience and loyalty? The 4 major differences to be taken into account if this is to be achieved are explained below.

Average basket

One of the main differences between B2C and B2B payment is the value of the average basket. In fact, in B2C transactions, the average basket value is quite low. It can range from a few euros to a few hundred euros, but practically never reaches a substantial sum.

On the other hand, in B2B transactions, the value of this average basket can be far higher, ranging from several hundreds of euros to several thousands or even several tens of thousands of euros! And this sum can even be much higher in some cases.

This difference in average basket value leads to other particularities. Paying a few hundred euros instantly is simple, but when we are talking in tens of thousands of euros, the operation is immediately more complex. This leads to other differences, such as differences in methods and terms of payment.

Payment Methods

In B2C e-commerce, payment methods are mainly “electronic” (bank card, paypal) and synchronous (in real time).

A digital purchase path with card payment consists of a real-time authorisation request, which ensures that the money is available on the buyer’s account. It is quickly debited. The money is therefore transferred almost immediately from the buyer’s to the vendor’s account, which is why it is called a synchronous payment method.

However, in B2B transactions, purchases are larger and the buyer cannot always afford to pay instantly. That is why asynchronous payment methods are widely used. They include, for example, bank transfers, direct debits or even cheques that do not involve a real-time authorisation request, which therefore means that processes must be adapted.

As such payments are widely used in offline B2B transactions, they must be transposed online and made available on sales platforms to offer a consistent experience, which is a necessary condition for the successful development of online sales.

Fragmentation of the customer base and recurrence of purchases

In B2B, the customer base is far less fragmented than in B2C. However, one of the purposes of e-commerce is to reach customers who were previously inaccessible and to expand one’s catchment area. This, of course, fragments the customer base a little more than with offline transactions.

On the other hand, unlike B2C, since customers are buying to keep their company running, professional buyers make far more frequent purchases than individuals, up to several times a week as opposed to two to three times a year for many B2C players. Consequently, although B2B may talk of customers in process, the logic is not only transaction monitoring, but also broader customer account management.

Payment Terms

Offline, in B2B, very often payment terms such as 30 days from the end of the month are proposed. Players are therefore used to this system and are not prepared to pay for all their orders in advance.

Consequently, a B2B e-commerce site based solely on prepayment is not viable. Prepayment can be important and used in certain situations, such as in the case of low-value baskets or for a first purchase, when the buyer is not yet known. However, if a company wants to turn its site into a high-performance sales development tool and a transactional tool and not just an online showroom, it must be able to offer its customers the same experience online as offline by offering them appropriate payment terms.

Lastly, the same payment differences between B2B and B2C are found both online and offline. Digital channels will therefore also have to offer these differences if they are to provide a consistent customer experience. This is especially important for marketplaces. When vendors are recruited, they often ask how the operator intends to charge customers. If the operator does not offer payment methods and terms appropriate to B2B, vendors will remain doubtful about the success of the marketplace and it will therefore be more complicated to recruit them.

An appropriate B2B payment platform is therefore an important tool for ensuring customer and vendor experience and loyalty on marketplace sites.

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