Buyers’ Market, Sellers’ Strategy: Business Payments Networks Tackle Age-Old B2B Dilemma

The bench of B2B payment mechanisms is becoming deeper. From technologies like virtual cards and tokenization, real-time payments and beyond, businesses have a wide array of tools at their disposal.

But when the whistle blows, many businesses trot out the same old paper processes and checks. And it’s their loss, as failing to embrace more efficient B2B payment methods can relegate firms and their finance teams to the minor leagues.

“As digital payments have advanced and the technology that surrounds the payment acceptance landscape has evolved, the ability to implement, adhere and administer a payment policy that is both tied and centered to a merchant’s corporate objectives has become increasingly more important,” Kunal Patel, the general manager, payments at Billtrust, told PYMNTS as part of the monthlong PYMNTS B2B Outlook 2030 event, noting that this is even more crucial for firms handling large volumes of transactions.

Patel added that businesses need to balance their corporate goals — whether that’s improving cash flow, managing costs or enhancing customer satisfaction — with a well-structured payment acceptance policy.

“Merchants and suppliers are increasingly seeking to accelerate working capital, get paid faster and improve the customer experience,” Patel said.

The key challenge, however, lies in truly matching these objectives with payments acceptance policies — something that often requires sophisticated technology paired with a thoughtful approach to the way businesses interact with buyers.

The concept of accelerating payment velocity and streamlining acceptance is becoming central to the success of B2B companies. But while many organizations may hold clear financial goals — like accelerating working capital or delighting customers — their payment acceptance processes can be opaque and not reflect those ambitions.

“You might walk into the CFO’s office and find they have well-defined objectives, but when you dig into their payment policies, you find they’re not aligned,” Patel said.

For larger, more complex enterprises, this misalignment is especially problematic. Their payment policies need to be flexible and scalable, but often, these policies lack the nuance required to support diverse business segments.

When it comes to tracking the success of payment acceptance strategies, Patel emphasized the need for businesses to measure key performance indicators (KPIs) that directly relate to their overarching corporate goals. If the objective is optimizing working capital, businesses should focus on reducing days sales outstanding (DSO), a metric that measures the average time it takes for a company to collect payment after a sale. By optimizing DSO, businesses can more effectively align their payment policies with their goal of accelerating cash flow.

Choosing the right payment acceptance solution is crucial to achieving these goals. Patel outlined a structured approach, beginning with setting clear goals aligned with corporate objectives. Businesses must then implement the appropriate levers — such as early payment discounts or real-time payments networks — to drive the desired outcomes.

One example of such tooling is encouraging buyers to pay early by offering discounts, thereby improving working capital. Another approach might involve varying payment modalities over time.

“For example, within the first 20 days of an invoice, buyers can pay via any method, but after that period, only ACH payments are accepted,” Patel said. This method incentivizes early engagement while still providing flexibility for buyers.

Other critical KPIs include customer satisfaction, which can be measured through net promoter score (NPS), and cost management, where businesses monitor the costs associated with different payment methods.

“It’s crucial to tie back these KPIs to how the company tracks overall performance,” Patel said.

One of the most delicate aspects of optimizing payment acceptance is how to incentivize faster payments from customers without damaging business relationships. Patel recommended offering a broad range of payment preferences within a defined period to meet buyers where they are while encouraging earlier payments.

For instance, businesses could allow buyers to pay with their preferred method (such as card or ACH) within the first few days of the invoice’s lifecycle. After that period, the available payment options could be narrowed to drive earlier engagement and faster payment without causing undue friction.

“It’s about finding the balance between flexibility and encouraging quick payments,” Patel said.

Two significant technologies often mentioned in the context of optimizing B2B payments are virtual cards and tokenization.

Patel noted that virtual cards are becoming a popular payment method, particularly for large buyers. The ability to accept virtual cards can help businesses engage with key customers on their preferred terms, increasing payment acceptance and improving cash flow. However, there are challenges, including the manual overhead required to manage virtual card payments and the need for Payment Card Industry (PCI)-compliant processes.

Tokenization, while widely discussed, has yet to see widespread adoption in B2B payments. Nevertheless, it holds promise as a modality for securing transactions.

“Tokenization could become a more material participant in the marketplace,” Patel said, though the timeline for broader adoption remains unclear.

Looking ahead, as more companies move away from paper-based invoicing and manual payment processes, digital payments will become the norm, further accelerating payment velocity and streamlining acceptance.

“The real game-changer will be the technological infrastructure that supports these payments,” Patel said. “Large, complex merchants will need sophisticated AR frameworks to manage their payment policies, and this is where we expect to see the most significant innovations over the next few years.”

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