Determining if B2B BNPL is for you: a guide

Buy Now, Pay Later as a payment solution has been heating up in the B2B space. The pandemic has caused many businesses to move online, and with that, they have made great strides to improve the checkout process to meet buyer expectations. If you are a business owner with an online shop looking to integrate BNPL, this article will guide you through how you can choose a provider. But first, we must look at what B2B BNPL is and whether you will need its services.

What is Buy Now, Pay Later for B2B?

B2B Buy Now, Pay Later, abbreviated to B2B BNPL, is an alternative payment method for businesses. It allows buyers to make transactions immediately and pay for them down the line. BNPL providers facilitate these transactions. They pay business sellers upfront (or within a small window), and they become the point of contact for B2B buyers after the latter makes the transaction.

At checkout, buyers select payment terms based on their needs and preferences. Some standard payment terms are the use of installments, as well as the option to pay in full after 30, 60, or 90 days. Generally, providers oversee conducting credit checks on buyers and approving the transactions. They are also the ones to issue invoices and to chase up on them if payments are late.

B2C spaces have been using BNPL for a while now, and the payment method is popular amongst younger generations. In B2B spaces, the payment method has gained popularity for its ease of use and efficiency.

Advantages of B2B BNPL for sellers

It is not easy to understand why so many sellers and buyers swear by BNPL, despite its relative newness in the B2B space. Here is a run-down of some of the most significant advantages for sellers implementing the payment method in B2B e-Commerce:

Also Read  Ways to Apply for Holiday and Shopping Loans in India

Reduced financial risk

BNPL providers take on the seller’s financial risk when they facilitate transactions. They oversee credit checks, and they chase late invoices when they occur. Sellers do not have to worry about late or unpaid invoices, and they can receive big-ticket transactions with less worry.

Improved cashflow

When a transaction occurs, BNPL providers pay the seller upfront within a specified window. Depending on the provider, this can be within 5 days or 2 weeks. Regardless, the seller does not have to extend credit lines to the buyer directly and wait for payment.

Increased conversions

BNPL providers have been improving accessibility within the B2B payment space using automated credit checks conducted by AI. Machine learning has much greater breadth and depth when they perform credit checks, leading to more buyers being able to complete their transactions.

Higher customer satisfaction

Increased B2B buyer expectations include having a variety of payment solutions, fast transactions, and flexibility in making payments. BNPL fulfills all these requirements, meeting buyer expectations even as they soar.

Decreased administrative burden

Finally, as BNPL providers oversee the transaction and invoice-chasing processes, sellers get to relieve themselves of the burden of financial administration. Employees can focus on developing new products and services, and owners can free up time to expand the business.

Do you need B2B BNPL in your webshop?

If you are a B2B seller online, you may have heard all about these advantages of BNPL and wanted to integrate the payment solution into your webshop. Should you? One way to decide is to see if you are currently experiencing any of these difficulties in your business:

You spend a lot of time chasing invoices

In an ideal world, all buyers will pay their invoices on time. However, the reality is that as a B2B seller – or any kind of vendor – it is expected that you will spend time chasing invoices. However, if you find yourself spending a disproportionate amount of time on admin, and a lot of your invoices remain unpaid for months, BNPL may be for you.

Also Read  Earn Rewards for Paying Your Credit Card Bills & Loan EMIs with CheQ

You have cash flow problems.

Another reason you should consider BNPL is if these unpaid invoices create a dent in your accounts. Large companies may find it is okay to spend months chasing an account. If you find it difficult to pay your employees, stock your shop, or run your business while waiting for late invoice payments, BNPL can be a good solution.

Your manual credit checks take a long time.

If you find yourself taking forever to conduct manual checks, BNPL may be for you. Many BNPL providers conduct credit checks on your behalf when a buyer chooses to defer their payment. This takes away your burden of having to spend time conducting credit checks. It can also improve your conversion rate, as more and more B2B buyers are growing tired of long approval times.

Your customers could be happier.

If your buyers have explicitly stated, they are not happy with your payment options, adding a new one is a no-brainer. You may know this by sending out a survey and doing market research. Integrating BNPL may be an excellent way for your customers to renew their interest in your 

You are looking to expand into new markets.

Finally, a very good reason to integrate BNPL into your web shop is if you are looking to expand into new markets. Research has shown that B2B buyer behavior differs vastly from continent to continent. 

Say you are a North American seller, and your local buyers usually have no problem paying for their goods with a corporate card. However, you are looking to expand to European markets, and you are reading that the use of corporate cards is rare in many European countries. In this case, do your research, and integrate new payment methods.

Also Read  Sending Money Abroad? Learn Top 5 Challenges & How to Navigate Them

Choosing a B2B BNPL provider

Having read all the above, you may be sure that B2B BNPL is for you. If that is the case, you must know how to choose the best provider for your webshop.

One of the first things to consider is if a provider operates in your country or continent. This is especially important if you are a business with international buyers. There are many continents- or region-specific BNPL providers that limit where they facilitate transactions or conduct credit checks. Make sure you choose one that can take care of your customers.

Another thing you must consider is the payment plans they offer. These plans must meet your buyers’ preferences. Some providers offer deferred payments in installments. Others offer deferred payment in one go, after 30, 60, or 90 days. Some offer both. Consider what will be most beneficial for your buyers.

You should also note how you will get paid as a seller. When a transaction goes through, what is the window the provider requires before they pay you? If it is important to you to receive the transaction amount as soon as possible, choose a provider that can offer this.

It is also crucial to check out the services these providers offer and their solutions. Would it be difficult to integrate the payment method into your webshop? Would your employees know how to navigate it? And does the provider have a team of professionals who can assist you in the way you need?

Finally, you should make sure the provider offers a pricing plan that is reasonable for you. Integrating a new payment method is a great way to expand your business, and it can potentially draw in more leads and conversions. However, you should select a provider that charges only what you can afford to pay upfront.


      Paisa Portal