B2B payments, level 2: credit transfers, corporate cards, and receivables financing. 6 chapters and a final quiz.
A complete tour of business-to-business payments: commercial and instant credit transfers, corporate and virtual cards, factoring, LME payment terms, the 2026–2027 e-invoicing rollout, and treasury netting.
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Choose between a standard SCT and an SCT Inst instant transfer based on the use case and the EU IPR framework
Distinguish corporate cards (T&E, lodge, P-cards) from virtual cards, and explain the value of Level 2/Level 3 data
Compare factoring, reverse factoring, and discounting to finance or secure receivables
Master the LME caps on payment terms and the penalties that apply in France
Chapter 1. Credit transfers, the backbone of B2B: standard SCT vs. SCT Inst.
In B2B, cards are the exception and the credit transfer is the rule. Invoices are paid on their due date, amounts are large, and there has to be a clear accounting trail. In France, credit transfers dwarf every other method by value. By transaction count, they account for only a fraction.
≈ 90 %
credit transfers’ share of the value of non-cash payments in France
Banque de France, payment methods mapping, 2024
100 000 €
typical SCT Inst cap before the IPR (now open and set by each bank)
EPC, SCT Inst rulebook
10 s
maximum execution time for an instant transfer, 24/7/365
EPC / Regulation (EU) 2024/886
Standard SCT and SCT Inst: two tools, two approaches
Criterion
SCT (standard credit transfer)
SCT Inst (instant)
Time to credit
D or D+1 (business days)
Under 10 seconds
Availability
Business days, cutoff times
24/7/365, including public holidays
Amount
No scheme cap
Cap set by the bank (often raised or removed since the IPR)
Revocability
Can be canceled before execution; recall possible
Irrevocable once executed
Rate
Often free or a few cents
Aligned with SCT pricing since January 2025 (IPR)
Typical B2B use
Supplier payment runs, payroll
Urgent payments, releasing a delivery, escrow, one-off salary payments
Standard SEPA credit transfer vs. instant credit transfer (July 2026)
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The IPR resets the baseline for instant payments
The EU Instant Payments Regulation (EU 2024/886) has required euro area banks to receive SCT Inst since January 9, 2025, and to send them since October 9, 2025. The price cannot exceed that of a standard transfer, and payee verification (Verification of Payee) is included. For treasurers, instant transfers are becoming an everyday tool. They are no longer a premium option.
Life of a SEPA commercial credit transfer
Treasurer (originator)
Sends an ISO 20022 pain.001 payment file from the ERP or online banking
Often in payment runs: dozens or hundreds of supplier invoices
➜
Originator's bank
Checks funds and the signature (EBICS TS, SwiftNet) and runs Verification of Payee
Flags a mismatch between the payee name and the IBAN
➜
CSM (STEP2, TIPS, CORE)
Clears and settles transactions between banks
STEP2 for batched SCT, TIPS for instant payments in real time
➜
Payee’s bank
Credits the supplier’s account
D/D+1 for SCT, under 10 s for SCT Inst
➜
Supplier
Matches the incoming payment to the invoice
The end-to-end reference (EndToEndId) and structured remittance information make cash application easier
Reconciliation has always been the weak spot of B2B credit transfers. A transfer that arrives without a usable reference has to be matched by hand. The migration to ISO 20022 (structured data, richer remittance information) and e-invoicing both aim to close that gap.
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Credit transfer fraud: the number one B2B risk
Supplier impersonation and CEO fraud both exploit credit transfers. Altered bank details on a fake invoice are all it takes. The defenses are Verification of Payee, dual approval for any change to bank details, segregation of duties, and a callback to the supplier on a known number, never the one in the suspicious email.
🎯 Quick question
Since the EU Instant Payments Regulation, what must euro area banks offer for instant credit transfers?
Chapter 2. Corporate and virtual cards: T&E, lodge, P-cards, and Level 2/3 data.
B2B cards don’t pay large supplier invoices. They excel at tail spend (travel, indirect procurement, SaaS subscriptions), where a transfer would be too cumbersome. The market has split into several product families, from the salesperson’s plastic card to the single-use virtual card generated through an API.
✈️
T&E (travel and expense) cards
Named corporate cards for employee travel expenses. Deferred debit, limits by profile, integration with expense management tools.
🏨
Lodge cards (central travel accounts)
Centralized card account lodged with a travel agency. All of the company’s tickets and hotel nights are charged to it, with no physical card. Reconciliation through enhanced data (traveler, booking, cost center).
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P-cards (purchasing cards)
Purchasing cards for low-value procurement. They eliminate the purchase order/invoice cycle on small purchases and lower processing costs.
🔢
Virtual cards (VCNs)
Card number generated on demand, often single-use, with amount, currency, merchant, and validity period locked. Ideal for OTAs, online advertising, subscriptions, and paying suppliers via API.
Level 1, 2, 3: the data that travels with the payment
Level
Data sent
Incentive
Level 1
Amount, date, merchant name
The minimum, same as a consumer card
Level 2
+ VAT number, tax amount, customer code, order reference
Accounting reconciliation, easier VAT recovery
Level 3
+ line-item detail: items, quantities, unit prices, product codes
Automated reconciliation, purchasing control; lower Visa and Mastercard interchange in the US
Transaction data levels on commercial cards
ℹ️
Commercial card interchange: outside the EU cap
The EU Interchange Fee Regulation (IFR 2015/751) caps interchange at 0.2%/0.3% for consumer cards. Commercial cards are excluded. Accepting a corporate card therefore costs the merchant significantly more, with interchange often above 1.5%. Some B2B suppliers pass the cost on or refuse the card.
Paying a supplier with a virtual card
Buyer
Approves the invoice in the ERP or procure-to-pay tool
➜
VCN platform
Generates a single-use card number via API
Exact amount, validity window, authorized MCC
➜
Supplier
Accepts the card like a standard card-not-present sale
➜
Issuer
Automatically matches the transaction to the generated number
Built-in reconciliation: one VCN = one invoice
Leading B2B and virtual card playersVisaMastercardAmerican ExpressAIAirPlusStripeAdyen
On the issuing side, newer players (Spendesk, Pliant, Payhawk, Stripe Issuing, Adyen Issuing) have made programmable virtual cards mainstream, with API creation, team budgets, and blocking by merchant category. Treasurers gain upfront control. A traditional expense report only provides control after the fact.
🎯 Quick question
What is a lodge card?
Chapter 3. Factoring and reverse factoring: financing receivables.
Between issuing an invoice and getting paid, 30, 60, or sometimes 90 days go by. That wait creates the working capital requirement. Factoring turns it into immediate cash. A financial institution, the factor, advances the value of the receivables in exchange for a fee and interest.
€421.6B
receivables purchased by factors in France in 2022, Europe’s largest market
ASF (Association française des Sociétés Financières, the French association of specialized finance companies)
Traditional factoring (the supplier sells its receivables)
Supplier
Delivers to its customer and issues an invoice payable in 60 days
Then assigns the receivable to the factor (subrogation or a Dailly assignment under French law)
➜
Factor
Immediately advances 85% to 95% of the amount including VAT
The balance goes into the guarantee reserve
➜
Customer (debtor)
Pays the invoice when due, directly to the factor
Except in confidential factoring, where the customer keeps paying the supplier
➜
Factor
Pays the balance to the supplier, minus fees
Can also cover nonpayment (non-recourse factoring)
Reverse factoring: when the buyer arranges the financing
In reverse factoring (also called supply chain finance), the large buyer sets up the program. As soon as it approves an invoice, its suppliers can get paid immediately by the funder. The rate is based on the buyer’s credit standing, which is much better than the suppliers’ own cost of borrowing. The buyer pays the funder on the normal due date.
Criterion
Factoring
Reverse factoring
Bill discounting
Initiator
The supplier
The buyer (large corporate)
The supplier (bill of exchange)
Basis of risk
Portfolio of debtors
Buyer’s credit
Drawee’s credit
Cost to the supplier
Medium to high
Low (based on the buyer’s rating)
Varies
Invoices covered
All or part of the receivables book
Invoices approved by the buyer
Accepted bills
Nonpayment cover available
Yes (non-recourse)
Not applicable (invoice already approved)
No
Three tools for financing receivables
⚠️
Reverse factoring: debt in disguise
Used heavily, reverse factoring can hide real debt. The buyer stretches its supplier payment terms by leaning on the funder, and the debt shows up under “trade payables” instead of financial debt. After the collapse of Carillion (2018) and the Greensill affair (2021), the IASB has required detailed note disclosures on these programs since 2024 (amendments to IAS 7 and IFRS 7).
🎯 Quick question
In a reverse factoring program, whose credit mainly carries the funder’s risk?
Chapter 4. Payment terms: the LME framework and its penalties.
In France, the 2008 Economic Modernization Act (LME), codified in Article L441-10 of the Commercial Code, limits contractual freedom on B2B payment terms. It aims to stop large buyers from turning their suppliers into free lenders.
Case
Maximum time
Default (no contract clause)
30 days after receipt of goods or performance of services
Standard contractual cap
60 days from the invoice date, or 45 days end of month if the contract provides for it
Periodic (summary) invoice
45 days after issuance
Road freight
30 days
Perishable goods
20 to 30 days depending on the product
Statutory caps on payment terms in France
Late payment: what the law imposes automatically
Late payment penalties: a contractual rate of at least 3 times the statutory interest rate; absent a clause, the ECB rate plus 10 percentage points. They accrue without any reminder.
Flat recovery fee: €40 per late invoice, due automatically, on top of any further compensation backed by evidence.
Administrative fine: up to €2 million for a legal entity (€4 million for a repeat offense), imposed by the DGCCRF, with the penalty always made public (“name and shame”).
≈ 13 days
average payment delay of French companies at the end of 2024
Altares / Observatoire des délais de paiement
€2M
maximum administrative fine per violation (legal entity)
Commercial Code, Art. L441-16
40 €
flat recovery fee due automatically on each late invoice
Commercial Code, Art. D441-5
2008
LME law
Caps payment terms at 60 days / 45 days end of month, effective 2009.
2011
EU Directive 2011/7/EU
Combating late payment in the EU. The cap is 60 days between businesses unless expressly agreed otherwise, and 30 days for the public sector.
2014-2015
Hamon law, then Macron law
The DGCCRF can impose administrative fines; the cap was raised to €2 million, with publication.
2023
Proposed EU regulation
The Commission proposes a strict 30-day cap; the text is still under negotiation and was heavily amended by Parliament in 2024.
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Why this is a payments issue, not just a legal one
Late payments shift several billion euros of cash from SMEs to large companies every year. E-invoicing (next chapter) will give the tax authority a real-time view of invoice and payment dates. Enforcing LME payment terms will become largely automatable.
🎯 Quick question
What is the standard contractual cap on B2B payment terms in France?
Chapter 5. E-invoicing in 2026–2027: approved platforms, Factur-X, and e-reporting.
France is rolling out e-invoicing to all VAT-registered businesses. PDFs sent by email are out; structured invoices routed through approved platforms are in. The tax authority cites three goals: fighting VAT fraud, cutting processing costs, and tracking business activity in near real time.
2021
Founding ordinance
The ordinance of September 15, 2021, sets the e-invoicing/e-reporting framework.
July 2023
Original timetable postponed
The launch planned for 2024 is postponed; the 2024 Finance Act sets the new timetable.
September 1, 2026
Phase one
All businesses must be able to receive electronic invoices; large companies and mid-sized companies must issue them.
September 1, 2027
Second phase
SMEs and microbusinesses must now issue e-invoices as well.
The Y model: approved platforms and the central directory
The chosen model relies on approved platforms (PAs), registered by the tax authority and called partner dematerialization platforms (PDPs) until the Finance Act for 2026. Since the 2024 overhaul, the public invoicing portal (PPF) no longer processes invoices itself. It now focuses on the recipient directory and the concentrator that passes data to the tax authority. Each business therefore chooses a PA, or an operator connected to one.
How an e-invoice flows (the Y model)
Supplier
Issues the structured invoice from its ERP through its approved platform
Core formats: Factur-X, UBL, or CII
➜
Sender's approved platform
Checks the invoice, routes it via the central directory, and extracts the tax data
E-invoicing covers domestic B2B invoices between French VAT-registered businesses. E-reporting sends the tax authority data on all other transactions: B2C sales, international transactions, and payment data for services. This second component is what ties the reform to payments.
For payment companies, the reform is an opportunity, because a structured invoice carries the IBAN, the due date, and the payment reference. It enables payment embedded in the invoice (a “pay” button using Request-to-Pay or an instant transfer) and fully automated end-to-end reconciliation.
🎯 Quick question
Starting September 1, 2026, which requirement applies to all French VAT-registered businesses?
Chapter 6. Netting and optimizing intragroup flows.
In an international group, subsidiaries invoice each other constantly for components, brand royalties, or services. Paying each invoice separately multiplies cross-border transfers, bank fees, and FX transactions. Netting offsets these reciprocal receivables and payables. Only the net balances are paid.
Bilateral and multilateral netting
In bilateral netting, two entities offset their positions. If A owes B 100 and B owes A 80, a single transfer of 20 settles it. In multilateral netting, a netting center calculates a single net balance for each subsidiary against the center, usually in a monthly cycle. Each entity makes or receives one payment, in its own currency.
Monthly multilateral netting cycle
Subsidiaries
Submit their intercompany invoices to the netting center
Common cutoff date, multiple currencies
➜
Netting center
Offsets all positions and calculates a single net balance per subsidiary
Converts at the fixing rate chosen for the cycle
➜
Net debtor subsidiaries
Pay their single balance to the center
One transfer instead of dozens
➜
Netting center
Pays out the balances due to net creditor subsidiaries
FX is handled centrally at a lower cost
50% to 90%
typical reduction in the number of intragroup payments after multilateral netting is introduced
Market practice, treasury studies by AFTE (French treasurers’ association)
1 cycle/month
most common frequency of corporate netting cycles
Market practice
Criterion
Netting
Cash pooling
Topic
Offset intragroup trade flows
Centralize cash balances
Mechanism
Periodic offsetting cycle
Physical sweep (ZBA) or notional pooling of balances
Main benefit
Fewer transfers and lower FX fees
Optimized debit/credit interest
Legal basis
Intragroup netting agreement
Treasury agreement (omnium)
Netting vs. cash pooling: two complementary tools
⚠️
Check the legal framework country by country
Netting requires the set-off to be legally enforceable. Some jurisdictions with exchange controls prohibit it or restrict it tightly. The netting agreement therefore has to be validated country by country, and transfer pricing on netted flows remains fully subject to tax documentation.
Netting, virtual cards, factoring, and e-invoicing converge on the same goal: a seamless procure-to-pay and order-to-cash cycle in which data moves with the money. That continuity underpins the modernization of B2B payments, a market several times larger than B2C by value.
