When one business makes a payment to another, it’s called a B2B payment. The most common kind of B2B is when a firm pays a company that supplies materials it needs for manufacturing or retail sales.

In our modern world of electronic payments, digital currencies and an emerging fintech sector, it may surprise you to learn that the vast majority of B2B payments are still made with paper checks. That accounts for 80% of all activity of this kind.

Another popular method of B2B payments is called ACH. That stands for Automated Clearinghouse payments that are handled electronically. The National Automated Clearinghouse Association reports that $24.7 billion in B2B payments were handled with ACH in 2019 alone.

Furthermore, ACH has become the most common method of paying workers. About 93% of all employees get their pay via direct deposit. It’s likely that ACH will overtake paper checks in just a few years.

Wire transfers are another way to make B2B payments. Currently, just 1% are handled with this method. On the other hand, the amount of each wire transfer is generally so large that this payment method accounts for 93% of the total volume of B2B payments.

A recent Federal Reserve study revealed that if 2% of the current corporate check volume switched to wire transfers, it would increase the volume of that method by 47%.

In the realm of small business operations, credit card payments are a common B2B vehicle. About 93% of small business owners engage in credit card B2B payments for some aspect of their business. Even so, this is not a popular choice because of the considerable fees associated with credit cards. That includes a 3% to 4% processing fee.

What about plain old cash? Is that still used in B2B payments? The surprising answer is yes. For small business operations, some 70% still engage in the exchange of legal tender currency notes for some business-related transactions.

One might think that an electronic form of B2B payment would be far more efficient than paper checks or cash. However, the reality is that electronic B2B is often laden down with bureaucratic paperwork. About 63% of invoices require from two to five managers to sign off on a transaction before it can be completed.

Also, the average time to process an electronic B2B invoice is a relatively lengthy 14 days.