B2B BNPL: what sellers need to know

In today’s digitised world, B2B buyer expectations are becoming more and more like those of B2C buyers. Business buyers have been using digital platforms and e-commerce websites to research and buy products independently of salespeople interactions, and they want a fast, easy, and seamless experience when making their purchases. Particularly, they want flexibility in their checkout process, from payments to shipping.

This is where B2B BNPL comes in.

If you are a seller looking to optimise your online shop by catering to changing buyer expectations in the new year, read on.

What is BNPL for B2B?

BNPL stands for Buy Now, Pay Later, and it refers to a type of short-term financing option that allows businesses to purchase goods and services from suppliers while settling payment later, rather than upfront.

B2B BNPL can be beneficial for several business types: those who need to make large purchases to invest in new equipment, but may not have the cash to do so, or those who have business models that do not allow for immediate payment. For example, construction companies may only get paid by their clients when they finish a remodel, which will usually be months after they make the initial materials purchase from their supplier.

Why offer B2B BNPL?

One of the ways to know if B2B BNPL will be right for your store is to look at what your customers need and what their business models are. Another way is to look at how you’re currently handling digital payments – and whether you need some help in sorting through a few things.

You are always chasing late invoices

The one thing that plagues businesses of all sizes is late invoices. Globally, 54% of businesses expect late invoice payments as a result of the pandemic and its aftermath. The late payment phenomenon has been particularly prevalent in Central Europe. If you are finding yourself and your staff constantly dedicating extra time and resources in chasing late invoices, you may need BNPL.

You have cashflow problems

Another reason you may want to consider a BNPL provider is if you have cashflow problems. If you struggle to cover your costs even though business is doing well – simply because of late or unpaid payments from your customers – a BNPL provider may be just what you need.

Your buyers have expressed wanting more

Finally, one reason you may consider alternative payment methods such as BNPL is because your customers have told you they want more. Their requests may have ranged from wanting more ways to pay and more flexibility in payment terms to a speedier checkout experience.

How B2B BNPL can help

If you have experienced the following above, it may be worth considering checking out a BNPL provider for B2B sellers and elevating your checkout experience. Depending on the provider and your industry, you may end up with these benefits:

Increased sales

The tangible benefit that most sellers meet is that of increased sales and conversions. BNPL makes it easier for customers of all types to afford larger purchases. When it comes to your start-up and individual clientele, you may also find it easier to perform more inclusive (and faster) credit checks through an automated process done by your provider.

Decreased admin time

You may also find the use of BNPL to decrease your overall admin time when it comes to processing transactions. From credit checking to invoice chasing, your BNPL provider is more than capable of handling things on your behalf. This means that you and your staff are free to focus on what matters most for your business – developing new ideas and your brand.

Improved customer retention

With increased financial flexibility for your buyers, B2B sellers who use BNPL may also find it easier to retain customers. In fact, in the past year, 77% of B2B buyers reported finding their last purchase too complicated and challenging. B2B BNPL can also simplify your checkout experience by having customers choose payment terms without difficulty and without additional onboarding. 

Increased competitiveness

Finally, alternative payment methods are becoming more and more popular in the B2B space around the world. Studies predict that in Europe and the US, B2B BNPL transactions will reach $200 billion over the next few years, contrasting the slowing growth of B2C BNPL. Integrating this alternative method into your online shop can keep it relevant and competitive in today’s landscape that is heading towards embedded finance solutions.

Considerations for B2B sellers when choosing a provider

As BNPL providers begin to dominate the B2B lanscape, with alternative payment methods like Biller solutions covering ground for business sellers to help them make the most of their transactions, now may be the time to upgrade your checkout process. For sellers considering a solution, below are some factors you may want to think about before deciding:

Fees and interest

The most important factor to consider for sellers is how much a provider will charge you for its services, and how much it will charge your buyers per transaction. You should ensure that you can cover your provider’s rates with the additional order value you receive after implementing the solution.

Payment terms

Not all BNPL providers offer the same payment terms for buyers. For example, some providers may offer a payment delay of 30, 60, or 90 days. Others may offer your buyers the option to pay in instalments over a certain period. You should make sure you know what your customers expect and want when it comes to payment flexibility.

Integration capability

Next, you should make sure your provider offers a solution that can easily be integrated into your existing platforms. Most providers are compatible with popular online shopping platforms where you may host your online shop. Others may offer the technical support you may need to plug in the solution.

Payment methods

You should also ensure that the provider offers an array of payment methods at checkout that will suit your customers. For example, do your buyers prefer to pay by bank transfer, direct debit, or other forms of digital payments such as PayPal? Understand what your buyers’ needs are, and check with the provider if they offer these account settlement methods.

Solution services

A great way to use a BNPL provider is to have someone else conduct credit checks and do bookkeeping on your behalf. Most providers offer these services alongside their actual payment solution. For example, they may help you chase invoices while you receive your payments straightaway. Understanding which services a provider offers is a great way to help you utilise your staff optimally.

Reliability of provider

One thing that you should certainly make sure is how reliable a provider is and how protected your data is. You can ascertain this through their years of experience in the field and in yours, customer testimonials, and whether they have financial backing from established institutions. The last one is especially true if you are working with a relatively new BNPL provider. You should also make sure they have secure management systems in place that can support bookkeeping on your behalf.

Customer support

Finally, one of the main reasons you are integrating a BNPL solution is to bring your B2B buyers quality support at checkout. Therefore, you should make sure the provider you choose has a professional support team who can offer you and your buyers the assistance you may need on your purchase journey anytime your shop is open, which may be 24/7.

The bottom line

Studies have shown that a whopping 61% of B2B buyers make their transactions online, and many of them find complicated checkout processes and limited payment options vexing. With these customer pain points in the B2B space, the ability to provide flexible payment options becomes a great way for sellers to stay competitive no matter their industry, and many have done so through B2B BNPL. If you are looking to upgrade your checkout experience and improve your sales and conversions, this alternative payment method may be just what you need.