2022 will see the emergence – or consolidation – of new B2B payment methods. The latest update from Meriem Ouenniche, Client Solution Manager at Webhelp Payment Services.
According to legislation that came into force on 1st February 2022.
Before explaining the respective advantages of Open Banking transfers, Pay By Link, Request To Pay and BNPL, let’s recall the main points of the legislation which came into force on 1st February 2022:
- the payment period for invoices in business-to-business transactions must begin on the invoice date;
- in addition, the legal payment period for invoices, fixed at 30 days, may be extended by agreement to 60 calendar days.
Open Banking transfers: quick irrevocable and secure B2B payments
Open Banking transfers are transfer orders initiated by a payer in favour of a recipient, whose information and IBAN are already filled in. The recipient may also offer this payment method via Open Banking, in particular as part of debt collection processes. 80% of companies would like to use it for B2B e-commerce. This payment method, incorporated into the company’s systems via an API, has four advantages:
1 – Open Banking transfers are simple, secure and irrevocable
Open Banking transfers are similar to traditional transfers in terms of amount and execution time, as well as security and guarantees. These transfers make collecting and reconciling payments easier. Once the transfer is received, the transaction is irrevocable. That means there are no expiration dates.
2 – Open Banking transfers fit in well with the customer journey
This payment method is easy to incorporate into your existing systems. Open Banking transfers can even use your logo and brand identity, providing a seamless customer experience. Transactions are easier and more reliable, as the amount, beneficiary and IBAN fields are already filled in.
3 – Open Banking transfers is competitively priced
Businesses have a lot to gain by using Open Banking transfers, which are highly cost-effective compared to other B2B payment solutions, such as traditional wire transfers.
4 – Open Banking transfers make large-scale transaction processing easier
Open Banking transfers make it easier to handle large numbers of payments, as customers do not need to enter the transfer information themselves. They also make it easy to see which transactions have been made.
Pay By Link: an excellent customer experience and an extensive ecosystem of payment solutions
It is quick and easy to send a Pay By Link payment link to a B2B customer by email, an instant messaging application or any other channel (mobile payment, SMS, QR Code, etc.).
Payments can also be received using virtual IBANs, which are created by the beneficiary and are instantly identifiable.
This payment solution combines three main advantages:
1 – Pay By Link is the equivalent of an instant payment button
After clicking on a Pay By Link, the payer is directed to their preferred payment method (bank account, bank card, PayPal, electronic wallet or eWallet, etc.). Payment is made after the payer’s confirmation is given. The customer experience is reassuring and seamless and tge conversion rates are optimal.
2 – Incorporating Pay By Link into CRM systems and other software is quick and easy
Payment links can be created as soon as an invoice is issued, either from the CRM, the invoicing software or the platform itself.
3 – Suitable for large transfers, Pay By Link is easily integrated with control and consolidation procedures
Although well-suited to the B2C sector, Pay By Link also has its place in B2B: it allows for large transfers and facilitates control and consolidation procedures (even those that are complex or regular).
Traceable and secure, Pay By Link solutions offer companies reassurance. Actual costs and processing times depend on the means of payment chosen by the payer. All control and dunning operations can be automated using partner solutions.
Request To Pay (RTP) can complement your payment solution
Having come into force on 15 June 2021 at the initiative of the European Payments Council, Request To Pay (RTP, or SEPA RTP) is not a payment solution on its own. It is more of a messaging functionality, in the sense that it materialises the payment initiation request, and thus completes the payment process. Details about the banks involved and the associated fees should be provided this year (2022).
The RTP service is based on the ISO 20022 standard; it is a secure and automated ‘end-to-end’ XML messaging process, with four main advantages:
1 – Request To Pay provides a good customer experience
An RTP can be sent by email or SMS, which allows for personalisation and minimal friction.
2 – The RTP provides clear information to the payer
The request informs the customer of the main elements of the transaction (the amount due, validity and execution dates, processing times, proposed means of payment, etc.). These messages may include the relevant invoices as an attachment or a payment reference.
3 – Request To Pay facilitates reconciliation processes
Fully digitised, RTP message flows allow for full automation of invoice-payment reconciliation procedures.
4 – Request To Pay is an excellent alternative to cheques and card payments
Thanks to fully digitised and automated management, RTP optimises management of the Bill-to-Cash process and offers an excellent alternative to cheques. Unlike a bank card transaction, there are no card fees or limits. SEPA transfers are irrevocable and, depending on the available choices, either ordinary or instant. As a reminder, SEPA instant transfers are limited to EUR 15,000 per transaction.
Buy Now Pay Later (BNPL), a fast payment method
Buy Now Pay Later (BNPL) looks set for a bright future in B2B transactions. It can be seen as an alternative to credit cards, for example. BNPL allows for fast payments and instant acceptance of the application.
For more information
B2B – Buy Now Pay Later, a new payment standard: 4 ways to stand out.
In conclusion, although they are newcomers to the B2B world, there are good reasons why each of these four payment methods – Open Banking, Pay By Link, Request To Pay and BNPL – are going to be a big part of the European markets in 2022, thanks to the functionalities and fluidity they bring to the customer-supplier relationship.
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