The buy Now Pay Later (BNPL) market is growing and disrupting consumer finance, and its market with much growth to come. Forecasts suggest increasing from US 132 billion today to US 3680 billion by 2030! Another notable statistic is the US has nearly a third of global sales. Plus, BNPL is not just for online sales. It’s also in-store via PoS (Point of Sale) software. Currently, the volume of BNPL sales is a 60/40 split, with 60% happening online.
You may think BNPL is just for the B2C (Business to Consumer) sector; however, much growth occurs with B2B companies. This business blog article will explore the benefits of Buy Now, Pay Later for B2B businesses, including:
- Higher sales volume
- Customer retention and loyalty
- The variable credit line
- Subscription model
- Payment by invoice
What is Buy Now, Pay Later?
Buy Now, Pay Later (BNPL) is a type of financing for sellers that allows buyers to purchase items and defer the payment for a set period. It can be attractive for buyers who want flexible payment options and sellers who want to grow their customer base and meet buyer expectations of efficiency in checkout processes.
Find out more in our earlier article on BNPL
Advantages of BNPL for B2B
BNPL can be a powerful sales tool, especially for big-ticket items. Customers who may have hesitated to purchase due to the upfront cost can be more likely to buy when they know they can spread out the payments over time. It can lead to a significant increase in sales for your business.
Convenient checkout experience
BNPL can make the checkout experience more convenient for your customers. The complete payment won’t have to be made all at once, and they won’t have to deal with the interest rates and other costs related to conventional financing options.
Increases customer loyalty
Offering BNPL can also help you build loyalty with your customers. Those who take advantage of this payment option will likely be more satisfied with their purchase and more likely to do business with you again.
Easy to set up
Integrating BNPL into a webshop is simple and can be done quickly and easily. Sellers must partner with a BNPL provider and integrate their payment option into your checkout process.
There’s no risk involved for your business when you offer BNPL. You’re not lending money to your customers or taking on additional financial obligations because your BNPL provider manages the financing arrangement with buyers, including the credit line value.
Helps manage cash flow
One of the most significant advantages of BNPL for businesses is that it can help them better manage their cash flow.
Improves cash flow forecasting
BNPL can also help businesses improve their cash flow forecasting. Knowing how much they’ll need to pay monthly can better plan for and manage their finances.
They can spread the payments over time rather than simultaneously paying for a large purchase. It can make it easier to budget for and afford big-ticket items.
Increases buying power
BNPL can also increase a business’s buying power. Since they’re not using all their available funds to pay for a purchase upfront, they’ll have more money to put toward other things. It can benefit growing businesses that need to invest in new equipment or inventory.
Builds relationships with suppliers
Offering BNPL can also help businesses build stronger relationships with their suppliers. Those who offer this payment option will likely be seen as more flexible and accommodating, making it easier to negotiate better terms in the future.
Some well-known B2B BNPL providers
There are a few well-known B2B BNPL providers that you may want to consider partnering with for your business:
Bread is a leading provider of B2B financing, offering loans of up to $500,000 with terms of up to 36 months. They have a simple and easy application process, and you can get pre-approved for a loan in just minutes.
Credo is another popular provider of B2B financing, offering loans of up to $250,000 with terms of up to 24 months. They provide a quick and easy application process; you can get funding in as little as 48 hours.
Biller is a leading B2B invoicing and payments provider, offering to finance for up to $100,000. They have a simple and easy application process; you can get funding in as little as 24 hours.
BNPL has successfully disrupted the B2C market, and now its presence in B2B is notable as it shakes up trade finance.
Large enterprises with established FinTech and PoS systems are the early adopters of BNPL, making their presence felt by setting the terms. For example, the BNPL payment terms for B2B are more traditional, i.e., 30, 60, and 90 days, whereas for B2C, there are more payments, and the payments are more regular – i.e., weekly.