How are business-to-business (B2B) payments primarily processed?

Business-to-business (B2B) payments are primarily processed electronically via EFT (Electronic Funds Transfer) or wire transfers because these methods ensure a fast, secure, and efficient way to transfer funds between companies. Electronic payments reduce the time associated with processing and clear payments, which is crucial in B2B transactions where timely payments can impact cash flow and business relationships.

EFT encompasses various processes such as ACH (Automated Clearing House) transfers, which facilitate the direct transfer of funds between bank accounts and are widely used for recurring payments. Wire transfers, on the other hand, allow for immediate transfers of funds, making them suitable for urgent transactions. These electronic methods enhance record-keeping and provide a clear and immediate audit trail, which is beneficial for both parties involved.

In contrast, using credit card payments can introduce additional fees and may not always be the preferred method for larger transactions often seen in B2B settings. Cash transactions are generally less common in B2B environments due to issues around security, tracking, and the practicality of handling large amounts of cash. Manual invoicing, while still used in some businesses, is considered less efficient and can lead to slower processing times, errors, and delays in payment, making it less favorable than electronic methods in