Defining B2B payment processing
Money a company owes for the procurement of goods or services; the department that processes or manages these details.
Money owed to a company for the supply of goods or services; the department that processes or manages these details.
Refers to the unique relationship and commercial transactions that occur between businesses. On some level, every business requires another business to operate, whether it’s the procurement or supply of raw materials, power, equipment or professional services such as design and accounting.
A business purchasing goods or services from another business for commercial use.
A B2B transaction made with a commercial card, whereby the buyer sends a direct credit card payment to a supplier’s bank account, with zero action required by the supplier. (See Supplier Initiated Payment, or SIP, as a comparison.)
A traditional method of payment within B2B, wherein the buyer mails a physical, paper cheque, and the supplier deposits it in their bank. This method is costly and time consuming, and prey to problems including fraud, loss and delay.
Issued by a bank, a commercial card is used by businesses. It can be physical or virtual, and can come with specific allowances and limitations, as determined by the bank and/or user.
An electronic payment method of transferring funds directly from one bank account to another. Similar to cheques, an EFT requires that the issuer has sufficient funds to cover the transfer amount.
Refers to a virtual commercial card. Like a physical credit card, it has a 16-digit card number, expiry date and CVC (card verification code), but only exists electronically.
A transaction fee charged to merchants in card-based transactions. This fee is paid to the card-issuing bank, and covers handling costs as well as costs related to reducing fraud and bad debt.
Refers to the amount of information captured for a single card transaction. The more information a business provides with a transaction, the greater the data level becomes. This data is sent back to the business that made the original purchase and can be used by them to reconcile transactions.
Transaction details provided to the supplier, such as invoice number, itemized goods or services purchased and buyer identification.
An automated, electronic payment process that enables a supplier to receive payment from another business, without any action required.
A business selling goods or services to another business for commercial use.
A B2B transaction made with a commercial card, whereby the supplier collects the buyer’s card details and initiates the payment process. (See Buyer Initiated Payment, or BIP, as a comparison.)
An electronic payment method typically used for sending large sums of money between bank accounts or through a cash-transfer office.
Funds available to a business, which can be invested or used in day-to-day operations.