Ever wondered why Buy Now, Pay Later is booming in the B2C sector but still finding its footing in B2B? Our partner Billie breaks down why this payment method is becoming increasingly important for business customers and how merchants can benefit from it.
Within the business-to-consumer (B2C) market, Buy Now, Pay Later (BNPL) has gained significant attention, becoming one of the most popular and trending payment methods in the past few years. Rapid digitization and the advancement of payment technology have marked the road to success for shopping and payment giants such as Klarna and PayPal due to offering this payment option to their customers.
What by now is considered daily routine in B2C, is yet still an exception in the business-to-business (B2B) segment. Although the market potential for B2B digital commerce is four times bigger compared to B2C and despite the benefits and popularity of BNPL for businesses and customers alike, the B2B market is just beginning to tap into the potential that digitization and digital payment methods can offer. In this B2B market, buyers are increasingly longing for a modern BNPL solution and seeking the same convenience they experience in their personal shopping, including a better online purchasing experience. B2B merchants not only further investing into digitization but into offering BNPL to their business buyers can see substantial returns and further foster their growth.
A sleeping giant – B2B ecommerce market potential
Already today, B2B ecommerce is a massive market and constantly growing. It qualifies as one of the largest opportunities in Europe and beyond and therefore is of high interest for any merchant serving B2B.
In this emerging B2B ecommerce market and as purchasing behaviors evolve, buyers are longing for a modern BNPL solution in line with their needs and expectations.
Buyer behavior and expectations are constantly evolving
As online shopping becomes part of our everyday life and younger generations are entering the workforce, B2B buyers are looking for the same convenient purchase and payment experience seen in their personal shopping. And at the top of business buyers’ wish lists are payment terms that meet their needs, real-time automated B2C-like checkouts, maximum flexibility, and post-purchase care. Therefore, BNPL is increasingly demanded in B2B, with payment by invoice being by far the most popular option. In fact, 95% of all business buyers prefer this payment method (Source: B2B E-Commerce Report (ibi Research der Universität Regensburg) “What online payment methods would your company like to use/has your company used?”).
Another reason for the rising interest in Buy Now, Pay Later is the macroeconomic situation. There is a greater concern for available liquidity and flexibility to support cash flow needs which favor both: merchants and buyers. BNPL allows buyers to hold onto their cash and pay upon verification of the goods or services while merchants draw in new customers or even get paid upfront. Yet BNPL in B2B is not as widely spread across the ecommerce landscape as in B2C and can become a competitive advantage and key growth driver for merchants.
Buy now, pay later offers advantages for business buyers and merchants
In addition to the already mentioned benefits and reasons for increasing demand and popularity, Buy Now, Pay Later in B2B comes with several other advantages for both – merchants and buyers.
Merchants on the other side also gain benefits from offering such an in-demand payment method, chief among them being increased sales. The payment and purchase experience is improved across channels, as BNPL is not solely reserved for online checkouts, but omnichannel sales as well. The main advantages therefore include:
In order to leverage these advantages best and to get the most out of BNPL, merchants are advised to partner with a specialized B2B Buy Now, Pay Later provider. Not only, because running an in-house BNPL program comes with complex challenges not every merchant can easily solve on their own.
Shopware X Billie: Bringing BNPL to business buyers
As the leading global open-source ecommerce platform provider, Shopware is making it easier than ever to introduce Buy Now, Pay Later (BNPL) to B2B merchants and their business buyers. Thanks to a partnership with Billie, the BNPL solution tailored for business payments is available as an extension in the Shopware store. This straightforward integration means that over 45,000 merchants across Europe can integrate Billie through Shopware in just a few simple steps.
Merchants get paid upon shipment of goods and benefit from Billie’s real-time credit approval at checkout. Additionally, Billie provides full default payment and fraud coverage, enabling merchants to offer flexible payment terms while reducing credit risk. Billie’s professional dunning and collections services also help to reduce operational expenditure. Access via the Billie extension allows merchants to manage the post-purchase cycle, including order overview and handling refunds. Buyers can benefit from purchasing goods and deferring payment for up to 120 days, and can take advantage of high shopping cart limits of up to €100,000.
About Billie
Billie is the leading provider and pioneer of Buy Now, Pay Later solutions for business customers. The Berlin-based fintech enables online stores to offer businesses and public institutions the most popular payment method in B2B commerce: Payment by invoice. Billie’s sophisticated AI-powered risk models allow real-time credit approval for buyers, with shopping cart limits of up to €100,000, while providing full payment default and fraud risk protection for online merchants.
