How B2B BNPL Is Assisting SMEs?

How B2B BNPL Is Assisting SMEs?

Businesses of various sizes support every economy. Small and medium-sized businesses (SMEs) are often touted as the lifeblood of job creation, economic growth, and innovation. SMEs need access to finance, markets, and technical assistance to thrive. This is where B2B Buy Now, Pay Later (BNPL) comes in.

What is B2B BNPL, and why is it on the rise?

B2B BNPL stands for Buy Now, Pay Later in the business space, and BNPL is a short-term financing method sellers can integrate into their webshops. With BNPL,sellers can give their customers the option to defer their payment (to pay in instalments over several weeks or to pay upfront at a later date) at no extra cost to them, because the BNPL provider makes sure the seller gets paid regardless of when their customer pays for their purchases.

B2B BNPL is relatively new to the scene in comparison with its counterpart in the B2C space. However, it is becoming more popular due to the fact that business buyers are demanding and expecting more from the webshops they buy from. These days, they have decided that business buying over the phone or in person simply is not the most efficient method anymore, and they want to be able to buy online with the same efficiency they get as B2C consumers. This means fast checkout processes and flexible payment options.

This has led to the largest B2B webshops around the world rushing to integrate BNPL into their webshops to ensure they stay competitive online. And SMEs are slowly following suit, for good reason.

Frequent problems that SMEs face when it comes to their B2B webshop payments

  • Limited liquidity – This is the biggest problem faced by SMEs when they run webshops that cater to buyers. Buyers do not always pay their invoices on time, which can lead to cash flow problems for sellers.
  • Limited information when conducting credit checks – SMEs can and do offer other payment options such as credit, but that means they must conduct credit checks on their customers to ensure they are good for the money, and these checks can often be tedious and cumbersome, taking way longer than expected. SMEs may also have access to limited information when they run credit checks manually.
  • Not having enough resources to manage payments – Finally, SMEs may not have enough hands on deck when it comes to managing their payments and carrying out financial administrative duties like chasing late invoices, fielding customer enquiries, and figuring out what to do with defaulted payments.

The benefits of using BNPL for SMEs

Buy Now Pay Later for Marketplaces: The Ultimate B2B Guide | FundThrough

BNPL comes in and tackles these problems faced by SMEs head-on.

  • Increase liquidity –With BNPL, regardless of when the buyer chooses to pay, the seller (the SME, in this case) receives payment upfront within a specified period, guaranteed.
  • Outsourcing financial administrative duties – BNPL providers also provide credit checks in-house when they get onboarded with an SME and the solution is integrated in the webshop. Small business owners do not have to chase invoices or defaulted payments, nor do they have to conduct credit checks themselves.
  • Extra protection from fraud – One of the best things about BNPL providers is that they take on the SME’s financial risk when they are onboarded. Secure credit checks prevent fraud, and if a customer is approved for making a purchase and defaults on payment, the seller still gets paid.

B2B BNPL provider for SMEs

BNPL for SMEs can truly radicalise the way small business owners take part in the B2B eCommerce space, and there are many B2B BNPL providers on the rise.One of such is Amsterdam-based Biller solutions, a start-up that offers BNPL solutions for business sellers who are looking to simplify and streamline their payment processes.