What you’ll learn:

  • The most common types of B2B payment methods
  • Advantages and disadvantages of each method
  • How to choose the payment method that is right for you

How you choose to send and receive B2B payments has a significant impact on the overall financial health of your business. An effective payment method should help standardize your cash flow, reduce unnecessary fees and processing times, and give you fast access to working capital. Payment methods that aren’t the right fit for your needs can make you vulnerable to unexpected gaps in cash flow—a big problem for small businesses, startups, and solopreneurs who rely on revenue to cover recurring expenses, pay bills, and grow effectively. 

Here’s a quick rundown on the pros and cons of available payment methods and tips for how you should go about choosing the best fit for your business. 

What are B2B payment methods? 

B2B payments are transactions marking the exchange of goods or services between businesses. Business payments are a bit more complex than consumer payments. Rather than resulting in an immediate transfer of funds at the point of sale, business payments are typically processed throughout a billing cycle. The amount of money being handled can be quite large and there may be multiple parties involved in the approval and payment of a B2B transaction—from accounts payable and receivable to billing teams and bookkeepers. 

Today’s B2B payment method landscape is crowded. And with the popularity of consumer payment platforms like CashApp and Venmo, the lines between business and personal payment practices have become even more blurred. Here are the most common payment methods for B2B transactions and a quick rundown of the pros and cons associated with each one:

  1. Cash
  2. Debit/Credit
  3. ACH 
  4. Wire 
  5. Check
  6. Digital

💵 Cash 💵

Access to cash (aka, money that’s on-hand and available for use) is one of the most powerful resources any business can have—from sole proprietorships to large corporations. While cash is an important asset, it carries undeniable limitations as a payment method. 

Let’s start with the most significant arguments in favor of cash as a payment method: cash is a common currency, there are zero fees associated with cash payments, and cash always works. There’s no chance of technical difficulties or delays that can and sometimes do occur with certain digital payment or banking platforms, so cash is appealing to some business owners—particularly the ones running a side hustle or a freelance gig who might not see the value in setting up a more formal payment method. But operating in cash can create additional headaches down the road.  

There isn’t a clear record of any transaction made in cash. You can hang onto a printed or petty cash receipt for one-off cash exchanges, but that’s a lot of paper to keep organized on a recurring basis. During tax season, businesses that operate with cash as their primary payment method will be reconciling tax write-offs against an all-cash bookkeeping system. By comparison, digital payment platforms and banks provide a clear record of all sales for immediate reference in online statements or mobile dashboards.

💳  Debit / Credit 💳

If you want to send and receive payments via credit or debit cards, you’ll most likely start by sending your client a credit card authorization form. This form allows the client to fill out their billing information and provide consent to run their card for the invoice amount.

Many businesses prefer to conduct transactions via debit or credit cards because this form of payment is so common. It also offers a few key benefits—plastic is convenient, fast, and secure. While transactions on cards aren’t instant, they tend to clear faster than most other payment methods and can be recorded and balanced digitally. In instances of fraud, credit cards offer a line of defense. Both sides of a credit card transaction are protected. 

However, there are also some drawbacks for the party on the receiving end of card transactions— mainly, fees. When it comes to accepting payments, your business may want to avoid cards because they come with transaction processing fees which can be significant for large orders or projects. Credit card processors often charge between 1.5%-3.5% per transaction. 

Choosing not to accept debit/credit transactions means you could miss out on significant business from clients who prefer this payment method. But relying on cards as your primary payment method could mean you wind up paying more in fees than you need to. 

💻 ACH (Automated Clearing House) 💻

EFT stands for Electronic Funds Transfer, an umbrella term that refers to the electronic transfer of money across a payment network (like a bank) between two parties (a sender and a receiver.) 

An ACH payment is a specific kind of electronic funds transfer that’s processed through the Automated Clearing House network. Financial institutions use the Automated Clearing House network to process large batches of transactions, including direct deposit payments and tax refunds. 

There are two types of ACH payments: ACH credit payments and ACH debit payments. With an ACH credit payment, the payor initiates the transaction and sends the funds from their account to the payee’s account. In an ACH debit payment, the payee initiates the transaction, and the funds are pulled from the payor’s account to the payee’s account. 

ACH payments are popular for their convenience (they’re relatively easy to set up) and security. Once you have all the necessary information from the payee, you can schedule automatic recurring payments. This can be especially helpful if you have multiple bills to pay each month—you can essentially set it and forget it. ACH is considered an effective payment method for high-volume payouts like salaries, but keep in mind that the ACH network is only available in the U.S. which might limit your ability to use it for other business transactions. 

On the downside, there are some costs associated with ACH payments. Most banks charge a flat fee for each payment. While the amount is often lower than the fees associated with other EFT payments, like wire transfers, it’s still an expense you might be able to avoid with other payment methods. ACH payments can also be delayed by processing times. When you get paid via ACH, it can take up to 5 days for the money to appear in your account—these kinds of consistent delays may jeopardize cash flow for small businesses. 

💸  Wire Transfer 💸 

Wire transfers are another type of EFT payment conducted electronically across banks and transfer provider networks. The name comes from a time when these providers would use telegraph wires to conduct fund transfers.  

Wires are networks administered and managed by banks. Wire transfers rely on transfer service agencies positioned around the world to facilitate the transfer from sender to recipient. As a payment method, wire transfers are similar to ACH payments—but there are a few key differences to note. 

Firstly, wire transfers have faster processing times than ACH payments. Rather than waiting a few days for the payment to go through, wire transfers happen almost immediately. This same-day turnaround can be extremely convenient, but it also comes with an additional risk factor. Once you send a wire transfer, you cannot cancel it or refund it. Should that money ever need to get sent back, it cannot be done through the original wire transfer. (That’s why wire transfers are a common payment method in frauds and scams.)

Secondly, wire transfers have higher fees than ACH—up to $50 for some international payments. And the recipient of the payment might also need to pay a fee to access their money. 

In order for a small business to coordinate a wire transfer with their client or customer, both parties need to volunteer critical information, including:

  • The sender’s bank account and transit number
  • The recipient’s full name and contact information
  • The recipient’s bank account and transit number
  • The recipient’s routing number

If your small business does a lot of work internationally, a wire transfer might be worth considering. Since wire transfers are part of a global network, the immediacy of a wire transfer might be worth the transfer fee if it means a company can collect payment from another country sooner.

🖋 Check 🖋

Paper checks are still an acceptable form of payment for many business transactions, but they come with some serious drawbacks. For starters, checks can be slow moving—especially when they’re sent via the mail. It’s also reported that checks are expected to be completely phased out by 2026. As digital payments become more normalized, there are clear benefits to diversifying your payment methodology and setting your business up for the future. 

📲  Mobile 📲

Mobile payments, which are usually a type of EFT, have only grown more popular in the past few years. They offer convenience and speed, but some of these platforms charge fees and implement transaction limits for business payments. With mobile payment platforms like Venmo, Paypal, and Apple Wallet becoming the norm for consumer transactions and peer-to-peer payment, it’s only natural that B2B payments would eventually follow suit. (Hopscotch offers instant, fee-free payments and is designed specifically for businesses to connect, transact, and grow.)

Selecting Which Payment Type is Best

Every business is different—from the product or service they offer to the average transaction volume they process and their daily, monthly, or yearly cash flow needs. When considering which payment method is best for your business, consider the following:

  1. What level of cash flow does my business require to grow?
  2. How quickly do I need to receive money after my product is sold or service is rendered?
  3. How are my margins?
  4. Will transfer fees hinder my profitability significantly?
  5. What is the best way to receive payment based on the financial infrastructure I’ve built for my company?
  6. What processes and systems will increase efficiency? 

If you run a small business with 1-15 employees, you’re probably busy with a lot of day-to-day operational work. That means there isn’t much time left to focus on bookkeeping and financial tasks. Taking the time early on to set up 1-2 reliable, cost-effective, secure payment methods will help you develop efficient processes as you scale. 


What is a payment method?

Although it might seem obvious, a payment method is the “way by which an amount of money can be paid.” The ways we fund payments have evolved as our economy has become less cash-focused and online payment methods have become more popular.

What is the most common method of payment? 

The most common types of payment methods are:

  1. Cash
  2. Debit/Credit
  3. Electronic Funds Transfer (EFT)
  4. Wire Transfers
  5. Check
  6. Mobile
  7. Crypto

However, the most common method is currently debit and credit, which accounted for 70% of payments in 2021.

What is the safest payment method?

Data protection and financial safety are top of mind for all businesses, which is why Hopscotch transactions are protected by the latest encryption and security technology. Any of the above payment methods can be secure if you find the right payment processor, but keep in mind that many forms of payment also come with some amount of risk built in—so do your due diligence before setting up your preferred B2B payment method.