What are B2B International Payments? Benefits and Challenges
Global payments are booming. Experts forecast global payment revenues will reach $3.2 trillion by 2027 – up from $2.2 trillion in 2022.
Yet, businesses handling B2B cross-border payments face a complex landscape. They must manage fluctuating exchange rates, multiple currencies, and payment delays.
In this article, we explore B2B international payments. We’ll cover common challenges and best practices to streamline international business payment processes and reduce costs.
Table of Contents
What are B2B International Payments?
B2B international payments refer to transactions between businesses across borders, often in different currencies. These payments may flow through digital platforms, global marketplaces, or traditional banking systems.
Direct B2B payments are the financial lifelines that keep global trade moving – offering immediacy, cash flow and control. They are essential for purchasing goods and services, paying invoices, and building cross-border business relationships.
However, international payments are more complex than local payments. There are extra fees, hidden costs, regulatory hurdles, unpredictability when payments are received, and delays due to lengthy routing. These delays can be directly linked to delays in procurement and impact downstream activity.
With a global payment network provider like Thunes, businesses can digitise international payments – and tap into a vast payment infrastructure that reduces transaction costs, settlement time and risk.
B2B International Payment Methods
Choosing the right payment method for B2B international transactions is vital.
Let’s explore the most popular methods and how a payment network provider like Thunes can improve B2B international payments.
Bank Transfer
Bank transfers (also known as wire transfers) are a tried-and-true method for making international payments. Sending money from a bank account to an account overseas is a secure process that’s widely accepted, making it a staple for B2B transactions.
To make an international bank transfer, you may need the following details:
- Recipient’s full name and bank account number
- SWIFT/BIC code
- Bank’s name and address.
While reliable, international wire transfers can be slow; with more intermediaries, funding can take days to complete. The issue is that payments don’t automatically move between the sending and receiving bank. The less common the currency pair, the more correspondent banks are involved in the transaction process – incurring costs and delays at each stage.
Thunes’ Pay-to-Bank services solve these challenges. We developed our cross-border payment network and advanced infrastructure to eliminate intermediaries – delivering fast and traceable transactions with up to 10x lower fees.
Debit and Credit Card Payments
Using debit and credit cards for online and in-person international transactions is a convenient and widely accepted payment method, making it a go-to choice for many consumers.
However, businesses need to be mindful when making payments to protect against fraud and bad actors:
- Always make sure the website is secure – look for “https” in the URL and a padlock symbol.
- Never share PIN or card details via email – reputable merchants would never ask these details in this manner. This is often part of a ‘phishing’ exercise to extract privileged financial information.
- Regularly check bank statements for unauthorised transactions to catch and report any issues right away.
However, when making credit or debit payments, extra fees – foreign exchange fees, international transaction costs and other charges – can quickly add up. Connecting to Thunes’ Pay-to-Bank network allows businesses to handle payments of all sizes without incurring high transaction fees.
Challenges in B2B International Payments
B2B international payments are paving the way for global trade to expand.
However, it’s important to be aware of the challenges associated with cross-border transactions – and why a payment network like Thunes can offer the solutions needed for smooth, efficient, and secure transactions.
Friction and Delays
Traditional banking for B2B payments can be slow and complex due to multiple intermediaries and corresponding banks involved. Each additional layer can delay payments – and slow processing time means payments take 2-3 days or longer to settle in some countries.
Payment delays can disrupt businesses and damage relationships with international partners.
That’s why streamlining the payment process is essential. With instant, real-time payments, traceable transactions and transparent fees, Thunes removes friction and delay from the process, making international payments as seamless as domestic transfers.
Unpredictable Costs and Currency Conversion Fees
Currency conversion and fluctuating exchange rates complicate international B2B transactions.
These conversion fees from intermediaries can unexpectedly diminish cash flow, creating financial uncertainty. The unpredictable costs and varying currency exchange rates make it challenging for businesses to accurately budget and forecast expenses, impacting profitability and financial planning.
Thunes offers optimised and transparent FX fees that allow businesses to focus on growth and expansion while our platform handles the complexities of currency conversion.
With Thunes, businesses can benefit from:
- Transparent Pricing: Thunes uses transparent FX sources (e.g. Reuters) to fetch FX rates. These FX rates are transparently retrieved by our customers via our online dashboard, via API calls, or simply by asking a report from an account manager.
- Mitigated Currency Risks: For each processed transaction Thunes fetch the FX rate on that moment from the agreed FX source, freeze it for an hour so that Thunes customers have time to add its mark up on it. Thunes trading desk can let its customers purchase currency in bulk at a given FX rate and use this purchased currency to execute payout.
Regulatory Hurdles
Each country has its own rules for receiving and sending international transactions. It could be limits (max transaction amount), permitted class of trade and industry or the amount of supporting documentation required. These rules can make B2B international payments complex.
Banks and financial institutions also have strict rules, and use networks like SWIFT to ensure payments are compliant with international standards and that all information is collected/formatted correctly.
Businesses must invest time and money to meet these standards, and this slows operations and raises costs.
With a single, simple API connection, businesses can access Thunes’ global payment network – 130+ payout countries, 90 collection countries, 550+ payment methods and 85 currencies – and send/accept payments in every corner of the world.
Security Risks
High-value and complex B2B financial transactions are prime targets for fraud. Juniper Research estimates that cross-border payment fraud losses will reach $46.1 billion by 2027.
The significant sums of money and sensitive information involved – and that it travels between intermediaries and borders – necessitate robust security measures for B2B payments.
Businesses, banks and financial institutions deploy various practices to try and counter security risks, including encryption, two-factor authentication, biometrics and real-time fraud detection. However, these security protocols can add more complexity and cost to operations.
With Thunes, businesses are assured full compliance with Anti-Money Laundering (AML) and fraud requirements – and complete visibility into customer risk and real-time fraud monitoring.
Payment Interoperability
Local payment methods work well at home but are often not accepted internationally. Transferring funds to a local bank account can also incur high fees. This lack of universality limits payment efficiency and standardisation.
It leaves businesses using multiple systems to carry out a single payment – making management harder and errors more likely.
With one API integration, Thunes enables businesses, banks and marketplaces to achieve interoperability with most Real-time Payment (RTPs) networks worldwide, with the transparency, pricing, and speed to make cross-border transactions feel more like domestic RTP networks.
Best Practices in B2B International Payments
When it comes to B2B international payments, there are several best practices to follow to ensure transactions are seamless, transparent and low-cost.
1. Choosing the Right Payment Method
When choosing a payment method to integrate, it’s key to;
- Consider what the payment is for (goods/services), the size of payment, the urgency and the recipient’s preference,
- Compare fees and exchange rates from different providers,
- Use a locally appropriate payment method and modernised orchestration.
A global payment system like Thunes allows a business to optimise their payment offerings, ensuring the appropriate payment method is used for the transaction.
2. Transparency and Communication
B2B international payments are the bedrock of cross-border business relationships. Communicating fees, exchange rates, and expected timelines is essential to develop a working partnership that is fruitful for all parties.
Clear communication regarding payment terms, currencies, and potential fees helps avoid misunderstandings and ensures smooth transactions with your international business partners.
Thunes offers upfront FX rates and fees, fully traceable transactions and real-time reporting. Our platform delivers peace of mind and an enhanced customer experience – no delays, no confusion, just transfers that you can trust.
3. Managing Exchange Rates
Fluctuating exchange rates, hidden fees and uncertain timing can significantly impact the efficiency and cost-effectiveness of cross-border payments
With Thunes customers have full visibility on transaction prices and FX fees for thousands of currency pairs. Senders and beneficiaries can easily understand the amount they will send and receive in their local currency. Thunes can support bulk currency needs in 30+ currencies and match your exchange timing requirements to your business needs up to T+2 settlement
4. Payment Tracking and Reconciliation
Tracking payments and reconciling accounts is crucial for smooth cash flow management. Accurate record-keeping and automation software can ensure all payments are accounted for, reduce discrepancies and speed up reconciliation.
Thunes provides real-time reporting – including instant payment confirmation and enriched transaction information – to help its customers to understand where funds stand in the payout process.
For businesses making international payments, it makes the process visible and transparent. A business will always know where its money is and when it’s arrived. Moreover, if a transaction goes wrong, Thunes’ statuses can give its customers an understanding of what went wrong, thereby making it easier for its customers to communicate better with their users.
5. Use Technology to Streamline Payments
As payment processing continues to evolve, using technology to streamline B2B payments is highly recommended. Digitising the payment process cuts manual data entry work, increases deliverability, and enhances efficiency in international B2B payments.
Thunes provides a solution that streamlines payment processes, making transactions faster and more reliable.
- Real-time: Thunes’ real-time payment processing technology provides unparalleled level speed and convenience
- One Payment API: Access the most popular payment methods around the world via a single API.
- Easy Integration: Integrate and implement fast cross-border payments securely and cost-effectively. Our experienced Solutions Delivery team will be with you at every stage of the integration process.
Simplifying B2B Cross-Border Payments
As global trade continues to expand, international payments need to evolve.
With the right strategies – and the right partner – handling international B2B payments becomes an opportunity, not a challenge.
Ensure your business thrives by leveraging Thunes, the leading provider of cross-border payment services. For more information, get in touch or explore our range of products.
