How B2B Payments and B2C Payments Differ
Depending on the different industries among B2B and B2C companies, the type of differences may vary, although there are three main differences between B2B payment and B2C payments. While there are additional considerations when processing payments between B2B and B2C, these three are common and applicable to most industries.
1. Payment Size
Payment size refers to the average price of each transaction. Let’s consider a comparison between a B2B and B2C company. for example, a B2B company such as a law firm that specializes in patent litigation versus a B2C company such as a local cafe serving brunch. The amount of money the law firm charges per client is significantly higher than the amount of money the cafe charge per cup of coffee. Most B2B transactions are more substantial compared to B2C transactions.
2. Payment Frequency
Although, the frequency of these transactions is also much different. A B2C cafe will sell significantly more orders per day, week, or year than the number of clients a patent law firm will work with during that time. Therefore, the number of transactions is typically much higher among B2C businesses compared to B2B businesses.
3. Payment Terms
The last comparable difference is how the terms and decisions behind the sale are made. For the law firm, the relationship between the lawyer and the business owner plays an important part if the business owner will choose that firm to work with. Oftentimes, both businesses work with their leadership team before making any decisions or purchasing a service/product. The overall process of conducting B2B business often takes more time, therefore the payment process can be very complex and ongoing.
On the other hand, buying a coffee in the morning or a scone on the weekends is not an in-depth decision worthy of multiple players. Instead, it is a simple decision with very few steps needed to make the payment. The B2B payment terms are much less involved than that of a B2B transaction.
When working with a merchant processing company, they must understand how these differences impact the payment procedures to ensure your business is operating effectively. For example, this could mean saving money by eliminating unnecessary fees or streamlining certain information for quicker processes.
At Evolve Payment, we have worked with both B2B and B2C companies to ensure their payment processing services are set up to benefit their unique business. To learn more, please contact our team!