Enterprise businesses are increasingly venturing beyond their domestic markets, seeking to tap into the vast potential of international trade. At the heart of these global expansion efforts lies a critical component: B2B cross-border payments. These transactions facilitate the exchange of goods and services across economic borders, which can become a complicated and challenging process.

If your business is looking to expand into new markets or improve existing processes, understanding these complexities and having the tools to navigate them will ensure you’re set up for success. 

Most Common B2B Cross-Border Payment Methods

Before we dig into the detail of cross-border payment strategies, challenges and solutions - let’s review the most common forms of payment used in cross-border B2B payments

Bank transfers

Electronic money transfers between two separate banks or financial organisations are known as wire transfers. Wire transfers are sent over a variety of wire networks that cover diverse geographic regions all over the world. This kind of payment is frequently used for large transactions and can be sent in multiple currencies. The quantity restrictions vary according on the network and location.

Online payment platforms

With the use of their computers or mobile devices, people and businesses may send and receive money globally. As a cross-border payment method, these platforms have grown in popularity due to their competitive fees, additional product features & services and their administrative advantages.

Credit card transactions

Credit cards are generally accepted in all countries, and companies are able to take payments from clients in a variety of currencies. However, they can be costly due to the currency conversion fees that apply to credit card transactions. Credit cards are also the most commonly used payment method in cases of fraud.

EFT

Electronic bank transfers, electronic checks, or electronic payments are other names for electronic funds transfers, or EFTs. Through these transactions, people and companies can send and receive money electronically in a fast and secure manner. Generally speaking, this kind of payment is more convenient and quicker than other cross-border payment methods.

International money orders

International money orders are a type of payment that are made on paper and can be sent electronically via a third-party source or through the mail. They are usually used for lower transaction amounts and are available for purchase at banks and other financial organisations.

Defining your B2B Cross-Border Payment Strategy

To overcome the challenges associated with B2B cross-border payments and unlock the full potential of global expansion, merchants can implement the following strategies:

Understand your Target Markets’ Payment Preferences

Your approach to cross-border payments may differ significantly based on where you intend to do business. Start by investigating your target audience's individual demands and preferences in the locations you’re operating in. This involves determining common payment methods, payment terms and currency preferences, as well as any specific restrictions or requirements applicable to the countries you intend to service.

Optimising Payment Methods and Channels

Once you’re clear on the requirements from your buyers’ perspective, consider the requirements for your business. Carefully evaluating the pros and cons of different B2B payment methods to identify the most secure, streamlined, and cost-effective options for their cross-border transactions. Consider how you may need to offer diverse payment options to appeal to a wider audience within the market you’re targeting.

If your business transacts through both offline and online channels, you’ll want to find a solution that suits 
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Leveraging Specialised Payment Providers

Partnering with specialised B2B payment providers can help merchants navigate the complexities of cross-border payments. These providers offer services such as fixed exchange rates, transparent fee structures, and advanced payment tracking capabilities, which can help mitigate the risks and costs associated with international transactions.

Depending on your businesses & buyer requirements, you may want to consider offering differentiated payment options like PayLater (also known as B2B Buy Now, Pay Later). With Kriya PayLater you’re able to offer flexible payment terms and instalment options. PayLater enables buyers to pay on their own terms, while the merchant is paid upfront Kriya taking oh the credit risk. Kriya supports cross-border payments in 45 countries across Europe, North America, India, Middle East, Asia, Australia & New Zealand.

‍Learn more about how Kriya can help your business here.
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Streamlining Payment Processes with Automation

Embracing automated accounts payable (AP) workflows can significantly enhance the speed, visibility, and efficiency of cross-border payment processes. Automated solutions can help merchants reduce manual errors, improve reconciliation, and gain better control over their international transactions.
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Ensuring Comprehensive Documentation and Compliance

Diligently collecting and storing all relevant documentation, including invoices, receipts, and tax-related information, can help businesses maintain compliance with various regulatory requirements across different jurisdictions. This documentation facilitates smoother reconciliation and dispute resolution processes.
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Leveraging Data-Driven Insights

Analysing payment data and trends can provide valuable insights to help businesses make informed decisions about their cross-border payment strategies. This data-driven approach can inform decisions related to payment methods, exchange rate management, and overall optimisation of international payment processes.

Understanding the Complexities of B2B Cross-Border Payments

While the potential rewards of global expansion are substantial, navigating the intricacies of B2B cross-border payments can be a daunting task for merchants. These transactions often involve a multitude of challenges, including:

Currency Fluctuations and Exchange Rate Risks

Fluctuations in exchange rates can have a significant impact on the cost of cross-border transactions, leading to financial losses for merchants. Companies must carefully monitor and manage currency fluctuations to ensure the profitability of their international operations.

Regulatory Compliance and Tax Implications

Each country has its own set of regulations, taxes, and compliance requirements for cross-border payments. Failure to adhere to these rules can result in additional costs, delays, and potential legal consequences for merchants.

Hidden Fees and Intermediary Costs

Cross-border payments often involve a complex web of intermediaries, such as banks, payment providers, and currency exchanges, each of which may levy their own set of fees. Identifying and mitigating these hidden costs is crucial for maintaining the financial viability of international transactions.

Payment Fraud and Security Risks

The high-value nature of B2B cross-border payments makes them an attractive target for fraudsters. Companies must implement robust security measures and fraud detection mechanisms to protect their transactions and safeguard their financial interests.

Reconciliation and Visibility Challenges

Reconciling international payments can be a complex and time-consuming process, as merchants must ensure accurate records of all transactions and that payments have been received or sent correctly. Lack of visibility into the payment process can further complicate this challenge.

Varying Payment Preferences and Methods

Different countries and regions may prioritise different payment methods, making it necessary for merchants to adapt their payment infrastructure to accommodate diverse preferences and requirements across their global operations.

Solve Cross-Border Payments with Kriya.

With Kriya PayLater, we provide a solution that reduces the risks of global trading to a minimum, while providing an exceptional buyer experience:

‍Available in 45 countries - Merchants can offer PayLater to buyers in 45 countries across Europe, North America, India, Middle East, Asia, Australia & New Zealand. We support a range of currencies including; GBP, USD, EUR, AUD, CHF.

Offer flexible PayLater terms - Merchants are able to provide pay in instalment & flexible payment term options to buyers. Think of it as a digital trade credit.

Get Paid Upfront - You’ll get paid upfront, while buyers choose to pay on the terms that suit them. 

Offline & Online Sales Channels -  Merchants are able to offer flexible payment terms & payment plans for international B2B buyers across all your sales channels, from your website to tele-sales and more.

Avoid Credit & Fraud Risk - Kriya provides instant & seamless credit checks & authentication at the point of purchase protecting you from credit and fraud risk so you can focus on growth.

Single payment flow - PayLater is an easy, seamless payment flow with buyer authentication, credit limit setting & automated payment collection.

Strong backing - We’re backed by Barclays, Santander, Northzone & British Business Bank, giving you the reliability you need to trade with confidence.

Talk to our team today to find out more about how we can help you