Choosing the Right Payment Methods for B2B Transactions

Payment Methods

Choosing the Right Payment Methods for B2B Transactions

Ask a finance team which payment method it uses, and the honest answer is usually "several." Customers on a monthly plan pay by pre-authorized debit, a one-off project invoice gets paid by Interac e-Transfer, a few customers prefer to pay by card, and suppliers and contractors are paid by EFT. Few teams planned that mix. It grew one type of transaction at a time.

The hard part is rarely understanding a single method. It is knowing which one fits which job, and keeping the whole mix manageable as volume grows: separate portals, separate files, and separate statements to reconcile.

This guide compares how EFT/ACH, pre-authorized debit, Interac e-Transfer, and credit cards differ in practice, which jobs each suits, and how to run them side by side. It is written for finance teams, controllers, and business owners, and for the software teams who build payments into their products.

What Actually Differs Between B2B Payment Methods

Before matching methods to transactions, it helps to compare them on the things that change how your team works day to day, not just on the name of the method:

• Who starts the payment: some payments are pushed by the payer (a customer sends an Interac e-Transfer from their own bank), while others are pulled by the business that is owed money (a pre-authorized debit collected from the customer's account). Payouts are pushed by you.
• How it is authorized: a pull needs the payer's authorization in advance, usually a pre-authorized debit agreement. A push is authorized by the sender each time. A card payment is authorized with the cardholder's details when it is submitted.
• What a failure looks like: a card payment is approved or declined when it is submitted. A bank payment can come back as returned, for example for insufficient funds or a closed account, and the return may not be reported for several days.
• How it is confirmed and reconciled: each method reports a status and a reference, but they arrive in different formats and on different timelines, which is what makes a mixed set of methods hard to reconcile by hand.

Beyond those mechanics, the right fit depends on the transaction itself: the amount, the volume, how often it repeats, whether money is coming in or going out, and what the other party prefers. Cost and speed vary by method, plan, and bank, so compare them against your own transaction mix. For the cost side of cards, see our guide to understanding credit card fees.

EFT, ACH, and Pre-Authorized Debit: Bank-Based Payments

An EFT (electronic funds transfer) moves money directly between bank accounts, in either direction. A debit collects money from a customer's account. A deposit sends money to a supplier's, contractor's, or employee's account. In the United States the equivalent network is called ACH, which is why you will often see the two written together as ACH/EFT. Our guide to ACH/EFT payments covers the mechanics in detail.

A pre-authorized debit (PAD) is the authorization that makes a recurring pull possible. The customer agrees once, in a written or electronically accepted agreement, to let you debit their account on a schedule or for specific invoices, and each collection after that runs on the EFT rail without the customer doing anything. Our pre-authorized debit guide explains the agreement and what to keep on file.

Bank payments fit best for:

• Recurring collections such as subscriptions, memberships, rent, instalments, and loan repayments
• High-volume collections, where many customers are collected in one run
• Supplier and payroll payouts, including bulk transfers to many recipients
• Scheduled payments, where the date is known in advance

Two things to plan for. First, a PAD needs a valid authorization on file, and the rules around recurring payments matter (see recurring payments in Canada). Keep the agreement on file. Second, expect a late return rather than treating a bank payment as final the moment it is submitted.

Interac e-Transfer for Business Payments

Interac e-Transfer is the method many Canadians already use to send money to each other, which is one reason it works well in business. Payers and payees use their own bank and a flow they already know.

It fits best for:

• One-off or ad hoc collections, such as a single invoice or a deposit from a customer who is not on a recurring plan
• Collections from payers with a Canadian bank account who would rather send the money from their own bank than agree to a debit
• Payouts to suppliers, contractors, or individuals with a Canadian bank account who would rather not share their bank details: the transfer is sent to an email address or mobile number
• Batches of Interac payments, when many recipients need to be paid at once

Because the sender approves each transfer, it is not a substitute for a pre-authorized debit when you need to collect on a schedule without asking each time. The two work well together: one for the predictable pull, the other for the occasional push. For a closer look at how it works for companies, see our guide to Interac e-Transfer for business, and for a side-by-side comparison, ACH vs Interac. Banks set their own sending limits on Interac e-Transfer, which is worth checking for large invoices. Interac e-Transfer works between Canadian bank accounts; for payers and payees with US bank accounts, ACH is the equivalent bank rail.

Credit Cards: Convenience and Payer Preference

Cards are a good fit when the payer wants them. Some businesses prefer to pay on a card for the protections, the rewards, or because it keeps the payment inside a purchasing process they already use.

Cards fit best for:

• Payers who prefer to pay by card, for the protection, the rewards, or because it fits their purchasing process
• Payers who do not use Canadian bank payment methods, such as customers outside Canada
• Payments a payer wants to make online without setting anything up with their bank

A cardholder can also dispute a charge through the card issuer (a chargeback), so keep your invoice and delivery records on file.

Matching the Payment Method to the Transaction

The most useful way to choose is to start from the transaction, not the method. Here is how the common B2B cases tend to line up:

Recurring customer billing

Pre-authorized debit on the EFT rail is the natural fit when the amount and schedule are known, because the customer authorizes once and each collection runs on its own. Customers who prefer not to grant a debit can pay each invoice by Interac e-Transfer or card instead, and a single customer can use a mix of methods over time.

One-off and high-value invoices

A single invoice does not need a standing agreement. A payment link generated already tied to the invoice lets the payer pay online by bank account or card, and a payment made through it can be matched to that invoice automatically. Payers who would rather use Interac e-Transfer can pay that way instead.

Supplier payments

EFT is the usual rail for paying suppliers, especially on a scheduled run or in bulk. Interac e-Transfer is useful for suppliers who prefer to be paid that way or who are paid only occasionally. Either way, the bill is approved in your accounting system, and once that system is connected through an API, the payment can be sent from there.

Payroll and contractor payouts

Regular payroll payments suit EFT (often called direct deposit when it is used for pay), since the date and recipients are known in advance and bulk transfers handle many people at once. Contractors, freelancers, and one-time payees are often easier to pay by Interac e-Transfer, including in batches.

Refunds

A refund is easiest to handle from the system that recorded the original payment, so the two stay linked. Once your accounting or ERP system is connected through an API, a refund can be triggered from there rather than as a separate manual step.

The answer is rarely "just one." A single business can collect by pre-authorized debit, accept an Interac e-Transfer on a one-off invoice, take a card from a customer who prefers it, and pay suppliers by EFT, all in the same week.

One Platform for All Your Payment Methods

Once a business uses more than one method, the pain is usually operational, not conceptual: a different tool for each, a different report for each, and a person stitching them together. The alternative is a single connection that runs all of them and reports on all of them in one place.

TIB Finance, a Canadian payment automation platform, supports EFT/ACH (including PAD and bulk transfers), Interac e-Transfer (including batch), credit cards, and Instant Deposits through one platform and API, so the same connection covers collections and payouts. Your team or your software chooses the method for each transaction, and statuses and reporting for every method are available in one place.

TIB Finance can connect to accounting and ERP systems through its API and webhooks. Direct integrations with specific platforms are also possible. To see how this fits into the wider picture, read about automating the full payment cycle and what payment automation changes for finance teams. Developers can start with the payment API integration guide and the guide to webhook events.

If your mix of payment methods has grown faster than your process for managing them, contact our team to see how TIB Finance fits what you collect and pay today.

Common Questions

What payment methods can a business use in Canada?

Businesses in Canada commonly use EFT (including pre-authorized debit for recurring collections), Interac e-Transfer, and credit cards. TIB Finance supports EFT/ACH (including PAD and bulk transfers), Interac e-Transfer (including batch), credit cards, and Instant Deposits on one platform.

What is the difference between EFT, pre-authorized debit, and Interac e-Transfer?

An EFT moves money directly between bank accounts and can be a debit the business collects (with the payer's prior authorization) or a deposit it sends. A pre-authorized debit is an EFT debit collected on a standing authorization; an Interac e-Transfer is approved by the payer each time. EFT suits recurring, scheduled, and high-volume work, while Interac e-Transfer suits one-off or ad hoc payments. Most businesses use both.

When should a business use pre-authorized debit?

Pre-authorized debit suits payments that repeat or follow a known schedule, such as subscriptions, rent, instalments, and recurring invoices. The customer authorizes once, and each later collection runs on the EFT rail without further action from them. A valid authorization must be kept on file.

Can I run EFT, Interac e-Transfer, and cards on one platform without a separate process for each?

Yes. With TIB Finance, collections can run through EFT, PAD, Interac e-Transfer, and cards on the same platform and API, so your team does not need a separate process for each, and statuses and reports cover all of them.

Which payment methods can I use to pay suppliers in Canada, and how do I pay by EFT?

To pay a supplier by EFT, you need their bank account details (institution, transit, and account numbers). Once the supplier's bill is approved, the payment is sent to that account as an EFT. With TIB Finance, supplier payouts can be sent by EFT or Interac e-Transfer, individually or in bulk, and the status of each payment is reported back by webhook.

Can I pay a supplier by Interac e-Transfer without their bank details?

Yes. An Interac e-Transfer is sent to an email address or mobile number, so the supplier does not have to share bank account details. The recipient needs a Canadian bank account. With TIB Finance, Interac e-Transfer payouts can be sent individually or in batches.

What happens when a bank payment is returned?

If a bank payment cannot be completed, for example because of insufficient funds or a closed account, the bank reports it as returned or refused. The return may not be reported for several days after the payment was submitted. The webhook is sent as soon as the bank reports the status, and what happens next, such as contacting the payer or collecting by another method, is up to your team.

How do I match an incoming payment to the right invoice?

With TIB Finance, a payment link can be generated already tied to an invoice, so a payment made through it can be matched to that invoice automatically. Statuses and transaction details are also available through the API and reports.