What is B2B Buy Now Pay Later?
Amazon now offers it. PayPal has already revamped it. Klarna is growing quickly. The truth is out there: Buy now, pay later (BNPL) is here to stay. For those who don’t know, BNPL allows shoppers to make a purchase and then pay for it later – either in one payment or instalments. Often, these payments are offered interest-free.
More and more sellers are taking their businesses online to adapt to changing customer behaviours. When COVID-19 required social distancing, businesses across industries had to go digital for the safety of sellers and buyers. Ordering systems moved online, and so did sales interactions. What’s interesting is, over time, this necessity has evolved into preference.
A study by McKinsey has shown that business buyers prefer to buy online because of its simplicity and ease. It’s no longer time-efficient to make purchases in-person or over the phone.
As a seller, this change in buyer demands means your business will need to adapt and offer attractive digital purchase options to stay competitive
Enter B2B Buy Now, Pay Later.
What is B2B Buy Now, Pay Later?
B2B Buy Now, Pay Later (B2B BNPL) is a type of short-term, interest-free financing that lets business buyers delay payment or spread the cost of a purchase over time, while the seller gets paid straight away.
More and more businesses are using a B2B BNPL payment method to buy things like materials or products for specific projects or jobs, office supplies, light fixtures, home office furniture, laptops and business services.
How does B2B BNPL work?
B2B Buy Now, Pay Later works just like it sounds – a business buyer buys something now, and then pays for the purchase later.
Practically, at the checkout, it looks like this:
1. Buyer adds a product in their basket
2. They choose Buy Now, Pay Later as their payment method
3. At the time of checkout, the buyer doens’t pay anything for the purchase.
4. You process the order as per normal and then ship the product to the buyer
5. The B2B BNPL provider pays you the total that you’re owed – minus fees – so that you don’t have to wait for payment or chase late invoices
6. The B2B BNPL provider then collects the full payment from the buyer at their chosen payment date.
The benefit of B2B BNPL is that buyers can buy what they want, when they want it, interest-free, and not worry about things like cash flow, credit card APRs or applying for trade credit.
You’re making it easy to buy online from you.
And at the same time, you don’t have to take on any of the risk or the manual admin. You get sell to those who want to buy from you, get paid for every purchase, and hand off the admin of credit assessment, setup and invoice managing to the BNPL provider.
Is B2B BNPL for me?
While Buy Now, Pay Later has been around for a while in B2C, it’s a fairly new in the B2B world.
If you’re wondering whether B2B BNPL is for you, you’re not alone.
With anything that’s new, there comes uncertainty. Plus, you might already be offering trade credit, invoices, credit card or other payment methods.
The good news is that you don’t need to change anything that you’re already doing – you can keep your current payment methods and just add B2B BNPL as an additional payment method in your checkout.
The good news is that you don’t need to change anything that you’re already doing – you can keep your current payment methods and just add B2B BNPL as an additional payment method in your checkout.
This way, you’re not changing anything for those customers that like how things are now, but you’re offering a new option for existing and new customers that want to buy now and pay later.
You may be undecided about BNPL, but this payment method will remove your need to chase late invoices, stabilise your cash flow, and even reduce your cart abandonment rate!
Why B2B BNPL?
B2B BNPL comes with a range of benefits.
1. Simplify your checkout process
On average, 60% of business buyers abandon cart because of a long checkout process.
A long checkout process looks like:
– Manual credit checks that take days to complete
– Needing to set up an account in order to buy
B2B BNPL simplifies the checkout process by automating credit- and fraud checks, making it accessible to buyers that don’t want to use a credit card or apply for and get a trade account set up.
2. Always get paid on time
On average, it can take up to 53 days from the time you issue an invoice until you get paid.
Not getting paid on time can hurt your business.
That’s close to 2 months
With B2B BNPL, you get paid straight away and the BNPL provider takes on the risk of late or unpaid invoices. This could be a game changer.
3. Wave goodbye to admin work
Completing repetitive administrative tasks can be a real time-suck.
Approximately 50% of B2B businesses spend 6 to 10 hours a month managing payments. That is 1.5 days spent on payments alone, and doesn’t include:
– Account setup
– Credit checks
– Onboarding
-Chasing late invoices
With B2B BNPL, you can leave this kind of admin behind, and hand it over to you BNPL provider.
4. Grow your customer base
B2B buyers come in all shapes and sizes, from medium and large sized companies to small businesses, startups, and the self-employed.
Including BNPL as a payment method in your online shop can make you more inclusive to the different types of B2B buyers out there. When you have several and flexible payment options, you can cater to more buyers and grow your customer base, without increasing operational burdens.
Learn more with Biller
If you have any questions on B2B BNPL as a payment method or would like to get started, you can drop us a line at info@biller.ai or schedule a meeting with us.
