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Buy now pay later for B2B: What it is, how it works & how to offer it

Gabriela Wasilewska
August 9, 2022
min read
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Buy now, pay later has exploded in popularity in the B2C sector, but what does BNPL look like in B2B and how can it benefit you as a business?

Buy now pay later in b2b

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. That’s a huge opportunity – but what does buy now, pay later look like in B2B? And how can it support businesses?

Read on for a breakdown of how buy now, pay later works for businesses and an overview of the B2B benefits.

Firstly, what is buy now, pay later?

In simple terms buy now, pay later (also referred to as “BNPL”) is a form of short-term loan. It is offered as 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 monies at the point of sale. You’ve likely heard of Klarna, who are the top supplier in the B2C market and the brand has come to be synonymous with the term.

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

What is B2B buy now pay later (BNPL)?

B2B buy now pay later, brings the same concept as BNPL in the consumer market to the B2B context. B2B BNPL enables buyers to receive goods and services while paying for them later, while the seller receives the money immediately from a BNPL provider. 

There are many providers for businesses to choose from (including Kriya).

B2B BNPL brings the popular benefits of the payment method to businesses looking to offer flexible payment terms, improve conversion rates, increase average order value & a range of other benefits we’ll discuss below.

What are the benefits of B2B Buy Now Pay Later?

1. Navigating Payment Terms in B2B Transactions

  • The Norm: B2B transactions often involve 30 to 60-day payment terms.
  • BNPL Solution: BNPL bridges this gap by allowing businesses to pay suppliers immediately while enjoying extended payment terms for themselves, ensuring stable cash flow.

2. Avoid late payments

  • A Stark Reality: As of January this year, statistics showed that 60% of small businesses and 90% of medium-sized enterprises were waiting on invoice payments.
  • BNPL's Role: By using BNPL, businesses can manage their finances more effectively, reducing the stress of delayed invoice payments on critical operations like payroll and investment.

3. The Rise of E-commerce and the Need for BNPL

  • Transition to Online: Post-pandemic, e-commerce has become the primary mode of B2B transactions.
  • BNPL as a Solution: BNPL adapts the traditional credit system for the digital era, offering seamless, secure online credit options that mirror offline practices.

4. Control of Cash Flow

  • Cash Flow Management: BNPL helps bridge cash flow gaps and enhances spending capacity, allowing businesses to maintain operations while waiting for revenues.
  • Business Growth: It enables purchasing without immediate cash availability, fostering faster expansion and investment in other business areas.
  • Flexibility and Control: BNPL offers decision-making power at the point of sale, providing flexibility for various purchase sizes and no long-term financial commitments.

5. Improve Conversion & Order Value

  • Higher Conversion Rates: BNPL can significantly increase conversion rates by removing financial barriers for customers at the point of purchase.
  • Boost in Order Value: Offering BNPL often leads to larger order sizes, as customers feel more comfortable making bigger purchases knowing they can spread the cost over time.

How does B2B BNPL work?

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

  1. A buyer shops as normal on the supplier’s website, adding items to their basket

  2. A BNPL option is offered at checkout alongside other payment methods, such as immediate card payment.

  3. The buyer orders their items as normal, but doesn’t have to pay right away (they may be able to choose to pay in 30 or 60 days, or in three smaller payments, for example)

  4. The supplier gets paid by the BNPL provider right away, while goods are delivered as usual to the buyer.

  5. 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 quick breakdown of how you can offer Buy Now Pay Later to your customers using Kriya Payments:

How Kriya Payments works. Buyer pays Kriya in 30, 60 days or in 3 monthly instalments, but receives the services as normal.

As a buyer you add your items to your cart as usual and when you get to checkout you’ll see one or more Kriya buttons. Depending on what the supplier wants to offer, you’ll be able to choose between paying in 30 days, 60 days, at the end of the following month, or in 3 monthly instalments. 

Once you’ve clicked on the payment option you’d like to go for, your order will be placed. We pay the supplier the full amount upfront and you can expect your shipment to arrive as normal. After the agreed time period, you pay the money directly back to us.

And just like that – you’re in control of your payments and your business can focus on growing and thriving.

BNPL in B2B eCommerce

Buy now pay later options are becoming increasingly common on B2B eCommerce websites. And it’s no surprise when you consider the benefits for both customers and sellers.

Integrating a BNPL solution into your B2B eCommerce platform can result in increased average order values, better conversion rates, and improved customer loyalty. It offers a seamless and secure checkout experience, reducing order abandonment rates even for high-value transactions.

With Kriya, getting started is simple. Learn more here or get in touch to find out more about how we get you up and running with BNPL.

BNPL in B2B Offline Sales

BNPL is not just for online businesses. Even traditional businesses with offline channels can benefit from offering BNPL to their customers. It can help in attracting new customers, retaining existing ones and enhancing overall customer satisfaction. Learn more about our multichannel BNPL solution here.

Is buy now, pay later the same as trad 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. Customers can select BNPL at the point of sale and receive rapid approval (with Kriya this is instant.) 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. 

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

The purpose of BNPL and credit cards is similar – they let you spread the cost of your spending over a period of time. Credit cards, however, tend to have less flexibility in repayment periods. You’ll usually pay off your credit card debt every month, whereas with BNPL you can choose from multiple different options and will only need to repay after that time period. So with a credit card you have to pay attention to the billing cycle and be more strategic with when you make your purchase.

Additionally, a credit card will impact your credit score. Even applying for a credit card will have an impact on your score if it’s not favourable.

What do B2B BNPL Companies do?

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 £27 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 

Join the growth focused businesses adding BNPL as an option for payment at the checkout and offline through Kriya. Take advantage of the benefits we’ve covered here; Improve conversion, increase order size and replace those outdated traditional trade credit processes slowing your teams down.

If you’re a B2B business get in touch today to find out more about Kriya’s BNPL product and services.

B2B Payments to boost your growth

To learn more about our payments and digital trade credit solutions book a call with us today.
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