Find out the pros and cons of popular B2B payment methods. Know which payment method is the right fit for your business. Learn more below!
Purchasing cards (P-Cards) are a form of company card that allows goods and services to be obtained without using out-dated purchasing methods such as paper checks. These cards are often given to trusted employees and can come with a variety of controls such as:
- Single-purchase dollar limits
- Monthly purchase limits
- Restrictions to specific merchant category codes (MCC)
- Monthly reviews and approvals of purchases by someone other than the cardholder
The downsides to using purchase cards is their lack of security. In face, they are one of the least secure options. Using P-Cards can expose your company to credit card fraud and identity theft. Purchase cards can often be confused with virtual cards (V-Cards), however, the two payment methods are very different.
Recent studies show that 33% of companies plan to implement real-time payments in the upcoming three years. Real-time payments (RTP) are a relatively new payment method that combines:
- Immediate fund availability
- Settlement finality
- Instant confirmation
- Integrated information flows
In terms of cost, real-time payments cost the same as other non-instant electronic payments and notably less than traditional methods such as paper checks. However, it is important to be aware that RTP has risks. RTP has a high risk for fraud and transactions can’t be halted once finalized. A real-time payment transaction is completed in under five seconds, which removes any chance to cancel an unauthorized payment.
Last, but certainly not least, are virtual cards. V-cards are a B2B payment method that is skyrocketing in popularity. Today, approximately 30% of companies are incorporating virtual cards into their payments strategy. We expect this number to grow significantly as more companies invest in no-touch payment methods. A virtual card is a 16-digit unique card number that is created to be single use. In practice, it is a virtual credit card that is designated for paying your vendors. Swapping out antiquated paper-based payment methods with one that uses virtual cards will streamline AP processes and give you the ability to:
- earn cash rebates
- increase security
- enhance internal controls
- No transaction fees
- Manage payments from anywhere
Which payment method would you choose for the future of your business?