Buy now, pay later (BNPL) has exploded in popularity in the B2C sector. In fact, experts are predicting that BNPL e-commerce transactions will total close to $700 billion by 2026. This represents a huge opportunity; with more and more buyers looking for B2B BNPL options at checkout, merchants need to ensure they’re catering for these demands in order to meet buyer expectations, and capitalising on the competitive advantage BNPL represents.

But what does buy now, pay later look like in B2B? And how can it support businesses

What is buy now, pay later (BNPL)?

In simple terms buy now, pay later (also referred to as “BNPL”) is a payment method that enables the buyer to receive their goods and services immediately, while spreading the cost over an agreed period of time.

The seller however, receives the money at the point of sale. You’ve likely heard of Klarna, the top supplier in the B2C market whose brand name has come to be synonymous with the term BNPL.

In this article we’ll cover the rising trend of BNPL in the B2B context.‍

What is B2B BNPL?

B2B BNPL enables business buyers to receive goods and services while paying for them later, while the merchant receives the money immediately from a BNPL provider, bringing the concept over from the consumer market to the B2B context. 

B2B BNPL brings the popular benefits of the payment method to businesses looking to offer flexible payment terms - you could almost think of it as a digital version of trade credit, but with even more benefits for the merchant (read on for more). 

The rise in B2B BNPL has been brought on by those growing buyer expectations. The modern B2B buyer expects the same level of convenience, flexibility and user experience that they enjoy in B2C transactions. B2B BNPL helps merchants deliver against those standards.

How does B2B BNPL work?

The exact terms might differ depending on the provider. However, the basic flow is:

1. The buyer selects a product/service on the merchant's website
   
   
2. BNPL is offered at checkout alongside other payment methods, such as immediate card payment.
   ‍
3. If the buyer selects to pay by BNPL, the B2B BNPL provider completes a credit check, authenticates the buyer and assigns spending limits & payment terms which are presented to the buyer (For example; they may be able to choose to pay in 30 or 60 days, or in three smaller payments).
   ‍
4. The buyer selects the credit terms that meet their requirements.
   ‍
5. The buyer then receives their goods/services, but only pays according to the agreed payment terms.
   ‍
6. The supplier gets paid by the BNPL provider right away, while goods are delivered as usual to the buyer.
   ‍
7. The buyer pays back the BNPL provider after the agreed time period – this could be an automatic payment, a bank transfer or a card payment.
   ‍

And that’s it! Buyers can keep making orders as usual and choose when they want to use BNPL for other orders.

Offer Buy Now Pay Later to your customers

Here’s a summary breakdown of how merchants can offer Buy Now Pay Later to buyers using Kriya Payments:

1. The buyer adds items to their cart as usual.some text
   1. If shopping online, at checkout they’ll see PayLater as a payment option.
   2. If shopping offline (telesales, in person, SMS, email), the sales person will generate the PayLater options and offer them through the appropriate channel.
2. Depending on what the supplier wants to offer, the buyer will be able to choose between paying in 30 days, 60 days, at the end of the following month, or in 3 monthly instalment payments. 
3. The order is then placed
4. Kriya pays the supplier the full amount upfront
5. The buyer pays the money directly to Kriya according to the agreed terms

BNPL in B2B eCommerce

Merchants can typically integrate BNPL into their eCommerce checkout experience in a few different ways. 

1. Direct API  - Build directly from an API for a highly flexible, customised checkout solution
2. Hosted Payments Flow - Insert a secure hosted payment page at checkout or embedded within other payment prompts
3. eCommerce Plugins - Simply add-on the BNPL function within your eCommerce platform once you’ve signed up to a B2B BNPL provider

Kriya supports all 3 integration methods - learn more about B2B BNPL eCommerce payments 

‍BNPL in Multi-Channel Payments

As we’ve covered above, BNPL is not just for online eCommerce businesses. Businesses that transact through offline channels realise the same benefits - whether that’s through a merchant portal or through methods that digitise the last mile of your offline orders.

1. Merchant Portal - Raise orders within a merchant portal for orders placed over the phone, email or in person
2. Payment Links - Send buyers links to pay on terms via SMS, messaging apps or email 
3. Invoice Links - Embed BNPL as a payment option within digital invoices

Learn more about our multichannel BNPL solution here.‍

Unified B2B BNPL Payments

Your buyer-base will have a diverse set of buying preferences, and it’s likely those preferences will shift and evolve over time. For merchants that transact across multiple sales channels, historically it’s been challenging to consistently offer credit terms. B2B BNPL provides the answer to this. Kriya enables merchants to offer B2B buyers the same flexible payment options and spending limits whether they’re ordering via eCommerce, email invoicing, tele-sales, in-store, via SMS and many more use cases.

This unified approach means merchants are able to easily provide the right payment options according to the buyers preference and hugely benefit from the efficiencies in managing payments in a centralised platform. 

Is buy now, pay later the same as trade credit?

Trade credit has been a staple of the business world for millennia. BNPL is a form of trade credit that provides a safe and simple way to offer trade credit online, modernising and accelerating processes common in the offline world.

While BNPL may seem similar to trade credit, there are key differences that set them apart: 

• Traditional trade credit often requires a complex and lengthy application process, whereas BNPL offers a quick and digital approval process.
  
  
• Buyers can select BNPL at the point of sale and receive rapid approval (with Kriya this is instant), plus the BNPL process is all handled in a single payment flow rather than the silo-ed processes that typically come with trade credit. This removes a great deal of manual administrative work when offering traditional Trade Credit options.
  
  
• With BNPL, sellers are paid upfront, eliminating the risk of non-payment. With Trade Credit sellers are not able to access the money until the buyer has paid according to the payment terms and schedule. 

Check out our more detailed guide on Trade Credit vs B2B BNPL‍

The benefits of B2B Buy Now Pay Later

There are more benefits to B2B BNPL than you’d might expect. We’ll cover the obvious - like improvements to conversion rate & order values - but also some of the efficiency and credit risk based benefits below.

Improvements to conversion rates & average order value

‍BNPL options provide clear benefits to the buyer; they’re able to manage costs according to their needs, purchase a higher volume without relying on immediate cash, or invest that cash in other areas of the business. As a result, merchants that offer B2B BNPL see higher conversion rates and average order values. Kriya merchants find that buyers are 82% more likely to purchase with PayLater, with average order values increasing +68%.

Furthermore, with buyer expectations increasing, merchants need to consider the cost of not offering BNPL and the impact that can have on conversion rates. When a buyer is comparing alternatives, flexible payment terms can often be the key differentiator.

A modern B2B payment experience

We’ll say it again. The modern B2B buyer’s expectations have reached new heights. And while most B2B transactions often involve 30 to 60-day payment terms, the processes used to collect payments are outdated. Trade credit is a clunky process that doesn’t fit into the modern B2B merchant’s payment experience & meet those buyer expectations.

B2B BNPL bridges this gap by allowing B2B merchants to offer credit terms in a single streamlined, autonomous payment flow. Furthermore, that payment flow can be integrated into any of your chosen sales channels; including your eCommerce store, via a merchant portal, or through payment links sent via invoice, email or SMS.
‍

Outsource risk 

When you use a B2B BNPL provider you’ll also have the option to outsource the credit risk. At Kriya, we take on the responsibility for checking the buyers creditworthiness, authenticating the buyer and setting the appropriate sending limits (this all happens in that slick single onboarding flow we covered in the previous section). 

While we take on the credit risk the merchant is paid upfront when the order is delivered. You’ll still get paid even if the buyer doesn’t pay, charges back or the transaction is fraudulent. 
‍

‍Built for both Online & Offline sales channels

Many B2B merchants today have an online and offline presence. Providing a payment experience that not only satisfies but delights, across all channels is rare in B2B. But again BNPL can help merchants capitalise on an opportunity for competitive advantage. B2B BNPL gives buyers the choice to pay on their own terms either through an eCommerce store, over the phone, or in person. 

For eCommerce payments Kriya’s PayLater can be integrated into your website via API or through our plugins for the leading eCommerce platforms (including Magento, Woo Commerce & Shopify). 
‍

Additionally sales teams can onboard buyers and provide payment terms for orders placed over the phone, in-store or other offline channels with Kriya Merchant Portal. In addition they can embed payment links in invoices, text messages or emails, which redirect buyers online to make payment.
‍

‍Enables Self-Serve

Top B2B merchants are always seeking ways to improve the productivity and efficiency of their sales teams. A popular strategy in recent times has been the shift to a self-serve buying experience, enabling orders to be placed without the need for a physical store, in-person sales person, or telephone call. 

Where payment terms are typically negotiated and tailored to each buyer, B2B BNPL automates this and lets the buyer choose from the options presented to them as part of the checkout process. This has the benefit of reducing the overall cost-of-sale, improving margins and generates significant efficiencies for the merchant. 

Offering an eCommerce channel also provides the merchant with an opportunity to win new customers at scale, while giving existing buyers an easier self-serve buying experience online. As a result merchants unlock significant efficiencies and are able to direct sales teams to new and existing buyers who actually need support.

Put an end to Late Payments

Bad debt and late payments affect all businesses in some way. As a result, they need to navigate cash flow challenges. And late payments aren’t going away, in fact, over half of businesses say that late payments increased over the course of 2023. 

By using BNPL, merchants can reduce the stress of delayed payments & avoid the cash flow issues that come with them: Merchants receive full payment upfront from BNPL providers, while the payment is automatically collected according to the payment terms.‍

How is buy now, pay later different from a credit card?

The purpose of BNPL and credit cards is similar – both methods let buyers spread the cost of their spending over a period of time. Credit cards, however, tend to have less flexibility in repayment periods. 

Buyers will usually pay off your credit card debt every month, whereas with BNPL they can choose from multiple options including paying in 30 days, 60 days, at the end of the following month, or in 3 monthly instalment payments, these terms are not usually available when paying by credit card.  

What do B2B BNPL companies do?

B2B BNPL providers offer a range of services that can help enhance your business operations. From providing a secure platform for transactions to assuming the risk of non-payment, BNPL providers ensure that both the buyer and the seller can focus on their business goals. Furthermore, BNPL providers often provide operational training and marketing support to ensure successful integration and utilisation of their services.

Kriya has been helping businesses unlock growth for over 12 years. We've processed over £28 billion in B2B payments and advanced over £3.5 billion of credit. With backing from high street banks including Barclays and Santander, our BNPL customers have confidence their credit lines are in the best hands.

Kriya: The end-to-end B2B BNPL solution 

If you’re looking to take advantage of the benefits we’ve covered here; improving conversion rates, increasing order size and replacing those outdated traditional trade credit processes that are slowing your teams down, then Kriya has the solution.

Since 2011, we’ve been helping businesses drive growth by offering flexible finance options. Today, PayLater is the modern solution for merchants who want to provide a frictionless payment experience, offer flexible payment terms & drive growth in sales across online & offline channels.

• One solution across all online & offline sales channels
• Instant buyer authentication & spending limits set
• Flexible payment term options
• Kriya takes on full credit risk of authenticated buyers
• Kriya pays you in full on delivery of order

Offer B2B BNPL with confidence: We’re backed by Barclays, Santander, Northzone, British Business Bank and more.

Ready to offer B2B BNPL? Speak to our team today.