Choosing B2B Payment Solutions for UK Businesses

A wholesaler in Leeds sends 400 invoices a month to trade customers. Half are paid by Bacs a few days late, a quarter by card at fees that quietly cost more than the delivery, and the rest arrive as bank transfers with the wrong reference that someone in finance has to match by hand. That is what B2B payments look like for most UK businesses, and it is why the choice of payment solution is a cash-flow decision, not an admin one.

This guide explains what B2B payments are, compares the methods UK businesses actually use, looks at the main providers, and sets out how to choose. It is written for established businesses that invoice other businesses: wholesalers and distributors, trade suppliers, professional services firms, multi-site operators and dealerships selling to the trade.

What are B2B payments?

B2B (business-to-business) payments are transfers of money between two companies for goods or services, as opposed to B2C payments from a consumer. A distributor paying a manufacturer, a restaurant group settling its drinks supplier, a law firm collecting fees from a corporate client, or a garage buying parts from a trade counter are all B2B payments.

They differ from consumer payments in three ways that matter. Values are higher, often thousands of pounds per invoice rather than tens. They run on credit terms, typically 30 days, so the payment is separated from the sale and has to be chased and reconciled. And the fee structure is different: commercial cards are not covered by the UK interchange fee caps that apply to consumer cards, so card acceptance on B2B invoices is usually more expensive than on a retail sale.

B2B payment methods used in the UK

Bacs. The traditional route for supplier payments and payroll. Cheap per transaction but takes three working days, and the payer controls the timing, which is why “the Bacs is going through” is the most common reason an invoice is late.

Faster Payments. Near-instant bank transfers, available 24/7, with most banks now allowing up to £1 million per payment (Pay.UK). Fast and free for the payer, but the payer still has to key your details and a reference, and mistakes in either land in your unreconciled pile.

CHAPS. Same-day guaranteed settlement for high-value payments such as property or large stock purchases, at a fixed fee per transfer from the bank. Overkill for routine invoices.

Direct Debit. The payee pulls an agreed amount on an agreed date under a mandate. Good for recurring B2B billing such as subscriptions, retainers and rentals; slower to set up and refundable under the Direct Debit Guarantee.

Commercial cards. Convenient for the buyer and instant for authorisation, but the most expensive route for the seller once commercial-card interchange, scheme fees and acquirer margin are added, and open to chargebacks.

Pay by Bank (open banking). The buyer clicks a link on the invoice or scans a QR code, is taken to their own Bank app, approves with Face ID or a fingerprint, and the money moves over Faster Payments with your reference attached automatically. No card details, no interchange, no chargebacks, and the payment is confirmed in seconds. Our open banking payments guide explains the mechanics; Atoa is the provider that puts it on your invoices.

Digital wallets. Apple Pay and Google Pay are card payments underneath, so they inherit card costs. Useful at consumer checkouts, rarely the answer for B2B invoices. Our guide to digital and mobile wallets covers where they do fit.

Comparing B2B payment methods

How B2B payments work, step by step

The seller raises an invoice with the amount, terms and a way to pay. The buyer pays by whichever method the invoice allows; on a bank transfer they key the details themselves, on a Pay by Bank invoice they click the link and approve in their Bank app. The provider processes the payment, the funds land in the seller’s account, and the payment is matched to the invoice in the accounting system, either by a person or automatically. The gaps between those steps are where cost and delay accumulate: a manual transfer with a mistyped reference can sit unreconciled for a week; a card payment can be reversed weeks later; a Pay by Bank payment is confirmed, referenced and reconciled in one motion.

B2B payment providers in the UK

Most B2B payment providers were built for one job: GoCardless for Direct Debit, Stripe and Worldpay for card acquiring, your bank for outbound transfers. That leaves a business stitching two or three of them together and reconciling by hand. Atoa covers collection end to end on one platform, and on the four numbers that matter to a finance team it comes out ahead.

Fees and settlement times for other providers vary by plan and volume; check each provider’s current pricing page. Atoa’s rates are on our pricing page.

Using B2B payment software

The software layer around payments is where the time goes back. Look for invoice creation and tracking, automated reminders before and after the due date, approval workflows for larger payments, and accounting integration so that every payment posts against the right invoice without retyping. Our guide to automated payment systems covers the options. With Atoa, a Pay by Bank link is added to invoices raised in Xero, QuickBooks or Sage, payment reminders go out by SMS or email, and settled payments reconcile automatically; the full list of connections is on our integrations page.

Open banking as a B2B payment solution

Open banking gives a regulated provider permission to initiate a payment straight from the buyer’s bank account. For B2B invoices that solves the three problems above at once. Cost: no card network, so the fee is a fraction of a commercial-card rate. Speed: Faster Payments, so funds are confirmed in seconds and available for wages and stock the same day. Reconciliation: the reference and invoice number travel with the payment, so finance stops matching by hand. It also removes chargeback risk on high-value invoices, and because the buyer authorises in their own Bank app with biometrics, it meets Strong Customer Authentication without the seller storing any bank or card data.

Atoa’s standard single-payment limit is £15,000, with higher limits available on request for businesses that regularly invoice above that. Recurring B2B collection by bank is the next step in the UK, and Atoa’s recurring payments page covers where that stands.

Choosing the right B2B payment solution

Four questions do most of the work. How much do you pay per £100 collected, including card fees, fixed pence, monthly platform charges and the cost of chasing? How quickly do you need the money in the account? How much of your team’s time goes on matching payments to invoices? And does the solution connect to the accounting software you already run, rather than adding another system? For an invoicing business, the answers usually point to Pay by Bank on the invoice as the default, cards as the fallback for buyers who insist, and Direct Debit for anything recurring.

Late payment is the other cost to price in. UK law lets you charge statutory interest at 8% above the Bank of England base rate on overdue commercial invoices (GOV.UK), but few businesses want to. A payment method that gets the invoice paid the day it lands is worth more than the interest you could charge on one that does not.

Where B2B payments are heading

Three trends will shape the next few years. Open banking is moving from consumer checkouts into invoicing and recurring collection, with commercial variable recurring payments the UK’s replacement for Direct Debit on the horizon. Automation is removing the reconciliation step altogether as payment data flows straight into accounting systems. And instant settlement is becoming the expectation rather than the premium, which changes how businesses manage working capital.

Key takeaways

For an established UK business that invoices other businesses, Pay by Bank on the invoice is now the lowest-fee, fastest-settling and easiest-to-reconcile way to get paid, with cards kept as a fallback and Direct Debit for recurring billing. Choose a provider on total cost per £100 collected, settlement speed, reconciliation and accounting integration. With Atoa, that means Pay by Bank from 0.7% + VAT and cards from 1.3% on one platform, connected to Xero, QuickBooks and Sage, with a 7-day free trial to start and pricing that is published, not quoted.

FAQs

What are B2B payment solutions?

B2B payment solutions are the methods and platforms businesses use to pay and get paid by other businesses: Bacs, Faster Payments and CHAPS bank transfers, Direct Debit, commercial cards, and Pay by Bank through open banking, together with the invoicing and reconciliation software around them.

What is the cheapest way to take B2B payments in the UK?

A manual bank transfer costs the seller nothing but is slow to reconcile. Among automated methods, Pay by Bank is the lowest-fee option, from 0.7% + VAT with Atoa, compared with 1.5% to 3.4% all-in for cards and more for commercial cards.

How long do B2B payments take?

Bacs takes three working days, Direct Debit three to five, cards one to three working days to settle, CHAPS same day, and Faster Payments or Pay by Bank seconds.

Are B2B payment solutions secure?

Bank transfers and Pay by Bank are authorised by the payer inside their own banking, with Pay by Bank using Face ID, fingerprint or passcode, so no card or account details are shared with the seller. Card payments rely on encryption and 3-D Secure and carry chargeback risk. Choose FCA-authorised providers.

Can B2B payment solutions integrate with my accounting software?

Yes. Atoa connects to Xero, QuickBooks and Sage so invoice payments are matched automatically; GoCardless and Stripe also offer accounting integrations. Check the integration covers reconciliation, not just invoice creation.

Is there a limit on B2B payments by Pay by Bank?

Atoa’s standard limit is £15,000 per payment, with higher limits available on request. Faster Payments itself supports up to £1 million per payment at most UK banks.

Sources

• Pay.UK, Faster Payment System
• Payment Systems Regulator, card-acquiring market review
• GOV.UK, Late commercial payments: charging interest and debt recovery
• Open Banking Limited, open banking payments data