Previously featured on Forbes Business Council 

When I helped found my payment system company in 2001, mobile apps, e-commerce and text-to-pay options on smartphones were not even in beta mode. Today, these technologies are so embedded in our daily lives that we rarely think about them.

Consumer-facing companies have been the front-runners in the race to digitization, using technology to better connect consumers and brands. But I see business-to-business organizations seeking to elevate their commerce practices and increasingly drawing inspiration from the business-to-consumer playbook. Recent innovations in areas like transaction processing, bill payments and global payouts reflect a trend that I and other payments industry leaders have called “B2B consumerization.”

It makes sense for business owners to explore ways to make invoicing, payroll, accounts payable and accounts receivable as frictionless, secure and easy as digital banking and mobile apps that consumers use every day. Here are some B2C methods that B2B leaders can draw inspiration from when it comes to payments.

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‘Consumerizing’ To Win

Consumer payments have been ahead of the pack in the race to digitization, but B2B businesses seem to be catching up. Legacy companies, long burdened by complex workflows and outdated procedures, are using advanced, automated technologies to pay other businesses in the same ways as they pay bills at home.

In a Tearsheet article, “The opportunities and evolution of the consumerization of B2B payments,” Darren Parslow, global head of Visa commercial solutions, noted that B2B companies are leveraging payment technologies to stay resilient, manage cash flow and improve efficiencies. In the article, he wrote, “It’s clear that the ‘consumerization of B2B’ is underway.”

Driving Growth

I am of the opinion that companies that successfully embrace digital commerce as a part of “consumerization” can experience numerous advantages, including reduced risk, enhanced relationships and improved access to working capital. The following are examples of B2B that B2C leaders can consider:

 Bill pay: Digital-first bill pay has enabled consumers to pay bills through links, texts and websites. Businesses can consider offering these conveniences to commercial clientele. Examples include links in emails and texts that facilitate single-click remittances.

• Flexible payment options: Flexibility and choice are hallmarks of consumer commerce. Businesses could offer clients an array of payment choices such as credit card payments, ACH debit and instant approvals for short-term loans and installment plans.

• Payment portals: Providing a single-access view of invoices and payments can help to reduce calls to customer service and provide a secure, 24/7 environment where customers can pay and track remittances, balances and open invoices.

New B2B Playbook

Considering today’s high interest rates, it could make sense for businesses to consider accepting digital payment methods, which in many cases I’ve found are less expensive to process than extended credit options. For example, in my experience, ACH payments are funded quickly, inexpensive to process and are the digital equivalent of accepting cash. These mostly no-code to low-code solutions are simple to set up and maintain.

In the current economic climate, businesses that are looking for extended bill pay options may get extra float with credit card payments, which are fully funded to payees by card issuers. In addition, I’ve found that most credit card processors allow large tickets for B2B companies.

To effectively compete in the digital-first world, I believe businesses need to manage outstanding receivables more efficiently. For example, paper checks account for 33% of all B2B payments in the U.S. and Canada, according to a survey by the Association for Financial Professionals.

A Tailored Approach Is Needed

Success in implementing consumer-based strategies requires forethought, beginning by assessing an organization’s framework, culture and partnerships to determine the right approach. The first order of business is ensuring the merchant category code (or MCC) assigned to an organization reflects its industry and business model. MCCs are unique identifiers that classify merchants as high or low risk, depending on ticket size, methods of payment acceptance and potential for customer disputes and chargebacks.

Industrial enterprises that primarily cater to traditional suppliers may want to adopt an incremental approach, beginning with A/B testing followed by a phased-in rollout of new payment options. Digital-first companies that cater to tech-savvy clientele might be comfortable introducing a new option alongside traditional invoicing.

Another important difference between consumer-based payment strategies and B2B payments is that remittances are more nuanced and specific than consumer-based payments, which call for basic cardholder information to complete a transaction. Conversely, B2B payment transactions must include additional data to qualify for the best processing rates. Precise requirements vary by card brand, but, in my experience, they typically include sales tax, merchant tax ID, purchase order and invoice numbers. Payment technologies that have transformed B2C commerce, such as tap-to-pay and contactless payments, must be robust enough to support these enhanced requirements.

Preparing For A Long Game

Another consideration when managing employee and management expectations for successful B2B commerce is that B2B commerce is a long game. B2B transactions typically involve higher volumes than consumer transactions and require more research, planning and formalized bidding processes in which vendors compete to win business.

The payments industry is approaching a tipping point as businesses embrace solutions that enhance efficiency, boost revenue and cut costs while improving the customer experience. From my perspective, B2B consumerization is not a fad; it’s a revolution that could reshape how businesses collect payments from partners, vendors and customers for years.

Previously featured on Forbes Business Council 

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