Understand how B2B payments work and how they provide speed and efficiency improvements over traditional payments. Read to learn about B2B payment solutions.
Every day trillions of dollars move between businesses. These business-to-business (B2B) transactions underpin everything from keeping factories running to facilitating digital services, with an estimated ~$88 trillion in B2B transactions in 2024 alone.
But despite their size and importance, the systems that support these B2B flows remain surprisingly outdated. Paper checks, legacy wires, and semi-manual ACH transfers still dominate. The result is a fragmented landscape of intermediaries, message formats, and approval chains that slow the movement of money and complicate reconciliation.
Understanding how today’s B2B payment system works, and its challenges, helps explain why new financial rails are being embraced by businesses, banks, and everyone in between.
What are B2B payments?
B2B payments are financial transactions between organizations, as opposed to individuals. Think, for example, a supplier invoices a buyer, a manufacturer pays a logistics partner, or a SaaS firm receives subscription fees from a corporate client. The values involved are typically large, with negotiated terms and multi-layered payment processes.
Unlike consumer payments, which usually clear quickly through card networks or mobile apps, B2B payments are more likely to involve a complex web of approvals, compliance checks, and back-office coordination across multiple systems. A single invoice, for example, may move through procurement, accounts payable, treasury, and legal before being cleared for release. Each step adds time and operational overhead.
Currently, the vast majority of B2B payments take place between small and midsize businesses. These payments can occur domestically or internationally, one-time or recurring, and across a wide range of industries. In almost every case, they rely on trusted relationships between counterparties and on financial infrastructure that can verify, process, and record value transfers efficiently and securely.
How do B2B payments work?
There’s no single network that handles business payments globally. Instead, companies rely on a patchwork of domestic and international rails.
The most common B2B payment methods include:
- Automated Clearing House (ACH) transfers are common for recurring domestic transactions. They are inexpensive but not real-time and often limited by daily processing windows.
- Wire transfers are often preferred for high-value, urgent, or international payments. They are faster than ACH but can cost $25–$50 per transaction and depend on correspondent banking for international settlement.
- Checks are still widely used in sectors like construction, insurance, and healthcare. They introduce manual handling and long clearing times.
- Corporate cards can simplify smaller purchases but carry interchange fees and limited acceptance in some regions.
- B2B payment platforms can integrate directly with enterprise systems to automate workflows and provide real-time visibility.
For instance, a US electronics distributor paying a supplier in Germany might initiate a wire transfer through its domestic bank. That payment could pass through two or three intermediary institutions, requires currency conversion, and can take several days to arrive.
To better understand the B2B payment landscape, let’s take a closer look at the main players involved in today’s B2B payment system.
Banks and financial institutions
Banks form the backbone of the global B2B payment network. They hold deposits, manage liquidity, and connect businesses to national and international clearing systems (those that verify and finalize financial transactions before funds are sent) such as ACH, Fedwire, CHAPS, SEPA, and SWIFT. Every B2B payment that moves through formal financial channels relies on a bank to initiate, route, or receive funds.
In this role, banks provide stability, security, and trust. They perform credit and risk assessments, handle foreign exchange (FX) conversions, and are tasked with adhering to Anti-Money Laundering (AML) and sanctions regulations. Their systems are designed to keep value safe as it travels through complex financial corridors.
Yet, the same strengths that make banks reliable also make them cautious. Legacy infrastructure was largely built to prioritize functionality without much concern for speed. Batch-based processing, for example, was implemented to cut costs — because processing individual transactions (which would be much quicker) would have been too expensive for legacy systems. In the future, banks could gain from adopting new interoperable networks that allow transactions to clear faster while maintaining the governance and compliance standards they uphold today.
Payment service providers and processors
Payment service providers (PSPs) and B2B payment processors act as intermediaries that help businesses access the banking system more efficiently. They offer technology layers (e.g., APIs, gateways, and dashboards) that allow companies to send and receive payments across currencies and geographies without building direct integrations with each intermediary bank involved in an end-to-end transfer — while still leveraging that network to clear and settle PSP transactions.
Many PSPs specialize in high-volume or recurring transactions, while others focus on enabling global marketplaces and SaaS billing. They’ve been instrumental in modernizing the user experience of B2B payments — providing better data, consolidated reporting, and faster onboarding for businesses that operate across multiple regions.
Still, most processors depend on the same underlying financial rails as banks. That dependency can limit the speed and transparency they can offer, particularly for international or high-value transactions. As blockchains emerge as a new payment settlement rail, PSPs are becoming more active participants in networks that move both money and data simultaneously with greater efficiency and control.
Enterprises and corporations
Enterprises are the largest users of B2B payment solutions — relying on them to pay suppliers, fund operations, manage payroll, and maintain relationships across global supply chains. Inside these organizations, payments pass through multiple functions to verify accuracy, manage cash flow, and reduce risk.
Large corporations typically use a combination of B2B payment methods, balancing cost and speed depending on transaction size and urgency. For example, wires may be used for strategic suppliers, ACH for recurring domestic bills, and B2B payment platforms for multi-currency or multi-entity settlements. These choices allow enterprises to tailor payment operations to their scale and complexity.
But managing this diversity of systems and rails is difficult. Fragmented data, long approval chains, and delayed reconciliation make it hard for finance teams to see cash positions clearly in real time. As next-generation payment networks evolve, more businesses are embracing financial infrastructure that unifies payment and data movement, reducing the gap between when a payment is sent and when value is truly received.
Technology providers and B2B payment platforms
Technology vendors and B2B payment platforms play a critical role in organizing how businesses initiate and track payments. By integrating with enterprise resource planning (ERP) and treasury systems, they allow finance teams to manage invoices, approvals, and settlements from one place.
These platforms have improved transparency and reduced human error, replacing paper trails with digital workflows. Many technology vendors now include tools for cash forecasting, compliance monitoring, and invoice matching, which makes them indispensable to corporate finance operations.
Similar to PSPs, most of these vendor platforms still depend on the underlying banking system for the actual movement of money. They manage the information layer of payments extremely well, but not the settlement layer itself. In the coming years, the most advanced B2B payment platforms could bridge that divide by embedding direct connectivity to new, interoperable payment networks.
The shortcomings of today’s B2B payment system
Today’s B2B payment system generally works, but at a cost of time, capital efficiency, and transparency. The main challenges fall into several recurring categories that collectively define why enterprise money movement has been so slow to modernize.
High operational and transaction costs
Moving money between businesses is often expensive. Each payment requires coordination between banks, internal finance teams, and often multiple intermediaries. Wire and FX fees compound quickly, particularly for cross-border B2B payments that pass through correspondent networks.
For global enterprises, these inefficiencies tie up capital and distort cash flow. For smaller firms, they can make large-value transactions prohibitively expensive. Over time, high friction in B2B payment processing becomes both a financial issue and a strategic one, affecting everything from effective product pricing to internal liquidity management.
Fragmented data and limited visibility
Each B2B payment network maintains its own data structure, and every participant records information differently. This fragmentation creates blind spots across corporate treasuries. A payment that appears as “settled” in one system may still be pending in another, complicating reconciliation and financial reporting.
According to EY’s 2025 AFP Global Liquidity Survey, 49% of respondents believe solutions that help achieve real-time visibility into corporate cash positions provide significant value. Without unified data, companies struggle to forecast liquidity accurately or identify failed payments promptly.
This lack of visibility triggers adverse ripple effects. It limits agility in investment decisions, delays end-of-quarter closes, and erodes trust between counterparties. In short, B2B payments remain one of the few major functions still operating in partial darkness despite underpinning a growing digital economy built on data.
Limited automation and scalability
Despite the growth of digital finance, most B2B payments remain far from automated. Many organizations still rely on spreadsheets, emails, and manual approvals to move funds between departments or across borders. Legacy ERP systems, siloed data, and entrenched workflows make full automation difficult to implement.
The consequence is scale inefficiency. As companies expand, their payment volumes rise exponentially, but their back-office capacity often doesn’t necessarily match that growth. Manual B2B payment processing introduces error risk, fraud exposure, and delays that compound with every additional market or supplier added to the network.
Complex compliance and regulatory oversight
Every B2B payment must pass through rigorous Anti-Money Laundering (AML), Counter-Terrorism Financing (CFT), and sanctions screening. This is especially true when it comes to cross-border transactions, where each party in the payment chain must independently go through multiple checks to meet jurisdictional requirements.
While necessary under the traditional financial regime, this redundancy slows settlement and increases operational cost. Compliance teams must reconcile inconsistent data formats and maintain detailed audit trails for regulators. According to LexisNexis, global financial institutions now spend more than $200 billion annually on compliance operations, much of it tied to payments.
Inconsistent standards between jurisdictions make matters worse. An invoice cleared in one country may trigger additional reviews in another, forcing legitimate payments into lengthy exception queues. US businesses spend hundreds of billions each year running compliance checks across multiple systems, and manual regulatory checks remain one of the most significant friction points in enterprise money movement.
Liquidity constraints and trapped capital
The mechanics of B2B payments often require companies to maintain idle balances to ensure smooth settlement. Large corporations hold funds across multiple currencies and bank accounts as a hedge against delays or FX fluctuations.
The opportunity cost is enormous. Trillions of dollars in working capital sit parked in prefunded accounts in the US and globally. For enterprises already operating on thin margins, this is capital that could otherwise be reinvested, used for R&D, or deployed to reduce debt.
In other words, trapped liquidity isn’t just a balance-sheet inefficiency. It’s a symptom of outdated settlement systems that can’t provide the real-time assurances modern business demands.
Modernizing B2B payments for the internet era
The current B2B payment system is functional but outdated. Its layers of intermediaries, manual workflows, and fragmented data slow the velocity of money and limit global scalability.
Modern B2B payments infrastructure must deliver three core capabilities:
- Speed and finality: real-time or near-real-time settlement that eliminates unnecessary float.
- Standardization and interoperability: universal messaging and API connectivity across banks, fintechs, and enterprises.
- Embedded compliance: programmable rules and reporting that travel with the transaction itself.
This evolution mirrors the broader transformation seen in cross-border payments, where programmable networks are starting to complement traditional correspondent models. As more enterprises digitize, B2B payment solutions that unify speed, transparency, and governance will become the foundation for competitive global business.
Circle Payments Network: Programmable infrastructure for global B2B payments
The modernization of enterprise finance requires infrastructure designed for the internet age. Circle Payments Network1 (CPN) represents this shift towards a more open, programmable payment network that connects banks, payment service providers (PSPs), virtual asset service providers (VASPs), and enterprises on shared, compliance-ready rails that enable always-on, real-time settlement using stablecoins such as USDC and EURC.2 It acts as a bridge between the world of crypto assets and the traditional financial system, merging blockchain programmability with the ability to meet compliance requirements of regulated financial institutions.
In practice, this means a corporate buyer can, for example, settle with a supplier near-instantly, with programmable rules defining when and how funds move. Treasury teams gain full visibility and control, while counterparties benefit from faster settlement and reduced capital lock-up. The end result is a unified B2B payment ecosystem where value moves as efficiently as data, and business relationships are strengthened by the systems that connect them.
Those interested in joining the network can learn more and register through the official CPN webpage.
1 Circle Technology Services, LLC (CTS) is the operator of Circle Payments Network (CPN) and offers products and services to financial institutions that participate in CPN to facilitate their CPN access and integration. CPN connects participating financial institutions around the world, with CTS serving as the technology service provider to participating financial institutions. While CTS does not hold funds or manage accounts on behalf of customers, we enable the global ecosystem of participating financial institutions to connect directly with each other, communicate securely, and settle directly with each other. CTS is not a party to transactions between participating financial institutions facilitated by CPN who use CPN to execute transactions at their own risk. Use of CPN is subject to the CPN Rules and the CPN Participation Agreement between CTS and a participating financial institution.
2 USDC and EURC are issued by regulated entities of Circle. See a list of Circle’s regulatory authorizations for more information.
