Tips, strategies, and ways for cross-border payments and trade for B2B and B2C companies.
Business-to-business (B2B), refers to business transactions between companies, such as between manufacturers and retailers or between wholesalers and retailers. On the other hand, Business-to-Customer (B2C) involve businesses that sell their products directly to their customers who are end-product users for their goods and services.
Cross-Border Business for B2B & B2C Companies
Cross-border business or cross-border e-commerce is best described as companies doing business together between different countries. Every aspect of business-like communication, payments, products happens between two different sides of the border. This form of trade happens between companies (B2B) or between a business and a consumer (B2C). Many aspects need to establish for conducting cross-border business operations inlcuding payments, shipping, warehouse facilities, etc .
Cross border payments involve a payee and a seller all from two different countries, and with the rise in online commerce, cross-border commerce is here to stay. As reported by McKinsey, towards the end of 2020, cross-border payments revenue was estimated to be around $1.9 trillion. In the B2B and B2C sectors, sellers and buyers must trade with institutions that allow payments and transactions across the border.
Cross border e-commerce started from eBay in 2006 as the US market worked on looping in the Chinese consumers to B2C and has been growing into the rest of the world ever since. Due to the recent pandemic, B2B and B2C cross-border trading have become crucial and grown at an unprecedented rate. Brands had to resort to cross-border trade as consumer demand raised from the global citizens' lockdown situations. This trend has since picked up and become a usual way of life between business owners and consumers.
Due to today`s ultra-connected world and global market, any business from any part of the world can become global, and many customers can be reached all over the world.
Depending on your geographical location, it's best you research to see what companies in that region do these forms of trade and what platforms they use to accept or send payments. Recent studies have indicated that millennials' role in B2B dealings has risen when it comes to leadership positions, and they are exercising their authority over purchases decisions; they have taken charge. With this purview, millennials are more prone to using technological and digital methods for conducting cross-border business operations.
Here are some of the strategies and tips that you need to check for cross-border trade and payments for B2B and B2C companies.
1. Product Quality
When it comes to B2C millennials, share demand on products that weren’t exhibited by previous generations because of the unique perspective they have in life. They always want to feel good about any purchase they make, and this is by the product quality and the brand and how that brand is perceived socially and globally. This leads to them sharing on social media platforms, creating a market pool for the product and services. Any company would be brilliant to involve the millennial generation in product promotion and as brand ambassadors.
2. Access digital payment solutions.
Existing payment methods can be complex and inconsistent as it involves multiple parties. The ability to make payments in the present and the future will improve the global market to great extents. The big challenge will be navigating these complexities and finding a solution to improve payment plans.
XanPay precisely provides and caters to all your needs for digital payments while conducting international payments. The process for onboarding on XanPay and access its technological solution is simple, fast, and easy. You can send or receive payments through XanPay's infrastructure to more than 15 countries.
3. Specialize in your customers' local payment platforms.
Since B2B is between two border companies, as a company, it would be wise to specialize in a platform like XanPay. XanPay provides tools to send payments to your vendors or business in their local payment method. This removes the hassle for businesses to convert and also eliminates extra processing charges.
4. Define your currency strategy.
As an international business, dealing with local currencies can be frustrating as they keep changing. For this matter, define your acceptable currency according to your geographical location; is it Singaporean Dollars or Indian Rupee (INR) amongst other options. Furthermore, the XanPool architecture ensures that you receive payments in your preferred currency directly in your bank account.
5. Get familiar with CHIPS and SWIFT.
Chips and swift are codes used in global payment processes. They are beneficial for huge transactions in B2B, and they quickly recognize the clients` bank as they receive and make international payments.
6. Reduce cross border transaction fees.
Global payment fees constitute a significant barrier in a transaction for either B2B or B2C. Since significant international transactions are carried out by banks and have to pass through multiple parties, it turns out to be super expensive. XanPay facilitates businesses to lower their transaction fee costs from as high as 7% with conventional financial infrastructure to less than 2%.
A reduction of fees could be a big help in trade; also, both parties have started to consider non-bank global payment systems like Cryptocurrencies due to the rise in technology. To send or receive money through cryptocurrencies, you can also consider using a service such as XanPool.
Last but not least, make sure to comply with global payments laws either as a company or a consumer. Cross border companies need to comply with the laws of both their countries' countries, their own, and their clients.