Modern payment processing is a complex system of network rules and real-time decisions that shape how quickly businesses get paid, how much they keep after fees, and how secure their payment flows are. Businesses need to navigate this swiftly changing market, which includes everything from instant bank transfers and e-invoicing mandates to machine learning fraud defenses. Being successful means businesses need to be paying careful attention to cash flow, profit margins, the customer experience, and using all the tools at their disposal to refine the process. Below, you’ll find a detailed look at the payment processing best practices that make a real difference.
What’s in this article?
- What are the most common payment methods for B2B and B2C businesses?
- How does modern payment processing work?
- How can automation and smart systems make payments faster and more reliable?
- Which digital payment trends should you be tracking?
- Why are real-time analytics and reporting important for cash flow visibility?
- How should businesses handle cross-border and international payments?
- How can you design payment strategies for different industries and customers?
- How can businesses improve their payment approval and success rates?
- What are best practices for payment reconciliation and recordkeeping?
- How should businesses manage refunds, partial payments, and payment plans?
- How Stripe Payments can help
What are the most common payment methods for B2B and B2C businesses?
Even with new payment tools emerging every year, most money still moves through a handful of familiar payment methods. The right mix of methods for your business depends on your customers’ preferences, your technical capabilities, and the size and volume of your typical transactions. Here are the most common payment methods globally.
Checks
Paper checks are slow and manual, but they haven’t vanished. While they’re less common for B2C payments, many finance teams use them for B2B invoicing and supplier payments. In 2024, US businesses moved $8.17 trillion USD via commercial checks.
Bank transfers
There are a few different types of bank transfers.
Direct debits are low-cost transfers where the payee can pull funds on a set schedule. This functionality makes them a popular choice for recurring payments such as subscriptions or utilities. Each region has its own direct debit system, including Single Euro Payments Area (SEPA) Direct Debits in Europe and Automated Clearing House (ACH) payments in the US.
Wire transfers are faster than direct debits, but the fees are higher, so they’re usually reserved for high-value or time-sensitive transactions.
Real-time payments through networks such as FedNow in the US, Unified Payments Interface (UPI) in India, and Pix in Brazil move money between accounts instantly, 24/7. In many regions, these systems transformed from peer-to-peer transfers to a way for consumers and businesses to pay instantly.
Digital wallets
Apple Pay, Google Pay, and other digital wallets let users pay with a tap or single click while hiding the underlying card or bank data. They’re commonly used in ecommerce and mobile checkout. China, India, and the US led the world in digital wallet adoption in 2024.
Credit and debit cards
Cards remain the default payment option for many customers, particularly in the US, where credit and debit cards made up 35% and 30% of payments in 2024, respectively. They’re also frequently used to pay for smaller business expenses and business travel. The trade-off is fees: a card swipe is fast and familiar, but the interchange fees can add up quickly on large transactions.
Offering a mix of these options gives you and your customers more flexibility. Stripe, for example, can help make offering these options simple by providing a single integration to turn on more than 75 payment methods. Stripe also offers Link—an accelerated checkout helping businesses boost revenue and save thousands of engineering hours with prebuilt user interfaces (UIs).
How does modern payment processing work?
Payments might seem straightforward: money leaves one account and shows up in another. But that process requires a series of interconnected steps and players working together to move the funds.
Here’s what’s happening behind the scenes, step-by-step:
Initiation: A customer chooses to pay via credit or debit card, digital wallet, or other payment method and enters their payment details.
Encryption: The payment gateway encrypts the transaction data and transmits it to the payment processor.
Authorization: The payment processor sends the transaction to the acquiring bank, which then forwards it on to the customer’s bank. If it’s a card payment, the transaction moves through the relevant card network.
Approval or decline: The customer’s bank checks if funds are available and approves or declines the payment.
Settlement: The processor facilitates the transfer of funds from the customer’s bank to the business’s bank. The business’s merchant account is credited with the payment amount, less any processing fees.
How can automation and smart systems make payments faster and more reliable?
If your team is tasked with handling every step, payments can drag and mistakes can creep in. Every manual step eliminated is one less chance for typos, misapplied credits, or lost invoices. Automation makes payments faster, more accurate, and easier to track and reconcile. Let’s take a closer look.
Instant invoicing or billing
As soon as goods ship or a subscription renews, automated systems can generate an invoice or bill by pulling the customer, items, and due date directly from order data. There’s no manual drafting or potential for typos. The request for payment goes out immediately, often with automatic reminders sent before and after the due date.
Faster approvals
In B2B, automated routing can determine who needs sign-off and notify them instantly. Managers can approve on their phones, and rules can auto-approve small invoices. Escalations also prevent bottlenecks when someone’s out of office.
On-time, optimized payments
Automation can kick off the actual payment by pushing a direct debit file to the bank, charging a card on file, or scheduling a real-time transfer. It’s commonly used in recurring payments for on-time transactions.
Real-time reconciliation
Incoming payments are automatically matched against invoices or sales orders. Even matches with small errors (e.g., slightly incorrect references or amounts) can be caught with machine learning. Exceptions are flagged right away.
Smarter retries
When payments fail, automation doesn’t give up. Failed card charges can be retried and direct debits re-presented at optimal times.
Accuracy at scale
As volumes grow, workflows scale automatically. Finance teams can handle more payments without hiring.
Which digital payment trends should you be tracking?
Payments are trending toward being more instant, digital-first, AI-secured, and flexible. As consumer expectations push innovation for B2C, B2B adoption follows. The businesses that benefit most are the ones paying attention to which of these trends actually fit their model and adopting them before they become the expectation. Here are the trends your business should be monitoring.
Instant payment networks
Regulators and banks are encouraging the use of instant transfers. In the EU, rules adopted in 2024 require SEPA Instant Credit Transfers to land within 10 seconds. And more countries are establishing their own networks—such as the United States’ FedNow, India’s UPI, and Brazil’s Pix—and businesses can use them to maintain smoother cash flow.
E-invoicing
Electronic invoices (e-invoices) plug straight into accounting systems and send invoices in structured electronic formats. They offer cleaner data, faster approvals, and simpler compliance. They’re currently mandated in France, Italy, Germany, Mexico, Brazil, and other markets. Even without mandates, many businesses are adopting e-invoicing for its speed and transparency.
AI-driven fraud detection
AI models can scan thousands of data points in milliseconds and flag anomalies such as duplicate invoices or transactions from unexpected locations. They can predict which payments are likely to fail, suggest smarter retries, and keep up where static fraud rules fall behind.
BNPL and flexible financing
Buy now, pay later (BNPL) continues to grow in B2C retail, and it’s now entering B2B. The system is simple: customers get flexibility, sellers are paid up front, and a third party takes on the risk. The global B2B BNPL market hit $14 billion in 2023, and adoption is expected to rise as more businesses seek a low-cost credit option.
Digital wallets and mobile-first payments
Digital wallets are already a common B2C payment method in Asia, the US, and Europe, and they’re starting to gain traction in B2B. As of 2025, 44% of UK financial institutions supported wallet-based B2B payments. While they likely won’t replace checks or wire transfers for six-figure invoices, they simplify smaller payments.
Stablecoins
Some businesses already use stablecoins for cross-border transfers. They offer global settlement in minutes, with more transparency and lower costs than correspondent banking. As the infrastructure matures, it’s becoming easier for B2B and B2C payments to happen 24/7 via stablecoins.
Why are real-time analytics and reporting important for cash flow visibility?
Live dashboards show which payments cleared today, which bounced, and which customers are slipping past due. Immediacy matters: spotting a late payment from a usually reliable client on Day 1 is very different from realizing it 30 days later. Real-time data offers finance teams the visibility to course correct in the moment rather than waiting for month-end reports. Here’s how that visibility can help you run your business.
Catch issues before they escalate
When authorization rates dip, chargebacks spike, or refunds pile up, those signals appear instantly in real-time reporting. The sooner you notice, the sooner you can fix it—whether it’s a fraud rule that’s too strict, a card issuer blocking a batch, or a technical issue after a system update.
Provide better customer service
When you can instantly confirm payment status, you can give your customers better visibility, too. If a customer asks whether a payment went through, you can confirm right away. If a recurring charge fails, you can contact the customer to update their payment information before their service is affected.
Gain strategic insight
Over time, real-time feeds create strategic insights on several items, such as payment trends, regional payment lag, and performance by method. That knowledge can empower teams to identify patterns early and adjust proactively.
How should businesses handle cross-border and international payments?
Moving money across borders has additional challenges, with currency conversion, different banking systems, compliance checks, and higher fees. But the right setup can make international transactions feel almost as simple as domestic ones. Here’s how to approach it.
Use local networks when possible
Relying only on international wires is slow and expensive. If you work with international customers, accepting local payment methods reduces friction and lowers costs. If you’re paying vendors, work with providers who can route payments through domestic networks so the recipient sees a local transfer instead of a costly cross-border payment.
Adopt a multicurrency strategy
Constant conversions eat into margins. Holding balances in key currencies avoids back-and-forth conversions when you both collect and spend in the same currency. Charging customers in their own currency and settling locally improves approval rates and saves on interchange. Many global processors support local acquiring, where transactions are routed through in-region banks to reduce cross-border fees and improve success rates.
Stripe, for example, supports multicurrency management in more than 135 currencies.
Stay compliant without slowing down
International transfers pass through layers of Anti-Money Laundering (AML), sanctions, and tax reporting checks. Incomplete details or missing documentation can cause delays. Providers with built-in compliance screening reduce the risk of funds being held mid-transfer. Include clear payment references (e.g., invoice numbers, purpose of payments) to help banks process transactions quickly.
Be strategic about timing and consolidation
If you’re sending multiple payments abroad each month, consolidate when possible to reduce flat fees. Using platforms with near-market exchange rates can yield meaningful savings for high-volume businesses compared to bank spreads.
A strong global payment setup means working with your business feels “local” to international partners and customers. That translates to fewer delays, lower costs, and better relationships—whether you’re collecting a subscription payment in euros or paying a supplier in rupees.
How can you design payment strategies for different industries and customers?
The right payment strategy strongly depends on your industry and who you’re billing. What works for a subscription-based software company might not work for a wholesaler or vice versa. Always meet customer expectations first, then layer in automation and efficiency. Here’s what different industries should keep in mind.
Software-as-a-service (SaaS) and subscriptions
Recurring billing runs on automation. Card charges and direct debits keep renewals running, while card account updater services can reduce involuntary churn. Enterprise customers often expect invoicing and net terms, so build in e-invoicing and accounts receivable (AR) automation.
Ecommerce and retail
Conversion hinges on speed and choice. Digital wallets, one-click checkout, and BNPL options can help lift completion rates—particularly on mobile. Fraud screening here is key: set up your filters so they block potential fraud without rejecting legitimate customers.
Professional services
Clean invoicing and partial payments are the usual process here. Online portals that let clients pay directly from an invoice tend to facilitate faster payments. Keep all parties informed with clear tracking of partial or milestone payments.
Manufacturing and wholesale
In these industries, transactions are large and often split into installments. Wire transfers and direct debits are dominant, with BNPL and trade credit platforms offering flexibility without adding risk to your balance sheet. Always include invoice or purchase order (PO) numbers in payment references to help with reconciliation.
Healthcare and regulated sectors
Compliance is front and center here. Payments need to integrate with industry-specific enterprise resource planning (ERP) systems, maintain detailed audit trails, and follow strict data requirements. Easy patient or client payment options through portals or kiosks can improve collections without risking compliance.
How can businesses improve their payment approval and success rates?
Every failed payment is lost revenue. Failed subscription payments can lead to churn; failed payments on large invoices can create cash flow problems. To improve your success rates, identify avoidable failures to remove them and manage the rest strategically. Here’s how to get started.
Keep payment details current
Expired or reissued cards lead to declines. Card account updater services automatically refresh stored credentials when banks issue new cards. Pay attention to return codes for direct debits: “account closed” requires a different set of next steps than “insufficient funds.”
Send richer data
Authorization decisions are based on risk signals. Including billing postal codes and card verification values (CVVs) can legitimize transactions to issuers and make approval more likely. This additional data can also help lower interchange rates.
Retry intelligently
Not all declines are final. Smart retry logic systems space out attempts based on issuer behavior. For example, it can retry after payday if the decline was due to insufficient funds, or at a different time of day if banks are throttling. Machine learning can automatically optimize retry timing, which can mean millions in recovered revenue at scale. Stripe’s recovery tools help businesses recover 57% of failed recurring payments on average.
Route transactions locally
Using local acquirers can raise approval rates and lower fees for cross-border transactions. The same principle applies to routing; some businesses use multiple processors and cascade transactions to a backup if the first declines.
Balance fraud rules
Overly strict filters can block real customers. Configure your fraud tools to flag edge cases for review instead of auto-declining. Regularly reviewing decline codes and chargeback data also helps calibrate rules so you’re not leaving money on the table.
Communicate with customers
When payments fail, be transparent. Friendly alerts and backup options (such as offering an alternative payment method) can help prevent churn and keep the customer relationship intact.
What are best practices for payment reconciliation and recordkeeping?
Reconciliation is where finance teams find out if the numbers really line up. Every dollar that lands in the bank has to match a sale, a payout, or a refund. When reconciliation runs on automation, clear references, and disciplined exception handling, finance teams are working from a financial picture they can actually rely on. These are some best practices to do it efficiently.
Automate the easy work
Most modern ERPs and accounts payable (AP) systems can auto-match payments to invoices using IDs, dates, or exact amounts. The more of that work you can offload to software, the less time you waste keying in details and the faster you can catch the exceptions that matter.
Use consistent references
The system only works if the data is clean. Unique invoice numbers, PO references, or structured remittance fields make reconciliation much easier. Be consistent with instructing your customers and vendors to use them.
Reconcile more than once a month
Reconciling just once a month can make it easy to fall behind. Weekly (or even daily for high volume) reconciliation helps you catch short pays, overpays, or stray fees while they’re still fixable.
Handle edge cases deliberately
Make sure you log any partial payments against the right invoice balances. Bundled payments need to be split cleanly across multiple bills, and overpayments should be tallied as credits. Clear rules for how to handle each of these payment types ensures uniformity.
Make your trails audit-proof
Processor fees, chargebacks, and refunds distort deposits if you don’t break them out. Document every adjustment, whether it’s a waived balance or a reallocated payment, so anyone reviewing later can follow the chain.
How should businesses manage refunds, partial payments, and payment plans?
Customers might return products, dispute invoices, and negotiate installments. When refunds, partial payments, and payment plans are handled deliberately and consistently, finance teams get a ledger that mirrors reality and customers are afforded the flexibility they want. Let’s look at how to handle these types of transactions.
Refunds
For these transactions, bear in mind:
Refunds should flow back through the original transaction whenever possible. That protects customers, simplifies reconciliation, and creates a direct audit trail.
Speed matters. The longer a refund takes, the more likely it is to become a dispute or chargeback.
In B2B, every refund needs a credit memo or record tied to the original invoice.
Partial payments
With partial payments, best practices include the following:
When a customer pays only part of an invoice, the open balance should remain visible.
Systems should apply payments against invoices directly, not lump them into general receipts.
If a customer short pays, flag it immediately so that the reason (e.g., dispute, discount, error) can be resolved and it’s not flagged during reconciliation.
Payment plans
Consider the below if you offer payment plans:
The finance team should make sure the full obligation stays visible as installments are tracked. That can mean multiple invoices scheduled out or a single invoice marked down as partial payments are applied.
Automating charges through direct debit pulls or stored cards can help reduce missed payments and the manual overhead of chasing them down.
How Stripe Payments can help
Stripe Payments provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.
Stripe Payments can help you:
Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.
Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
Learn more about how Stripe Payments can power your online and in-person payments, or get started today.