In today's highly sophisticated payments sector, Buy Now Pay Later (BNPL) solutions symbolize customer-centricity. Although B2C credit has been present for quite some time, BNPL offerings seemingly sprung from obscurity to become the ultimate consumer-centric offering in recent years. Yet, in terms of B2B payments, there was a significant gap in the credit ecosystem. This implied that archaic B2B payments were in dire need of change.

It often takes months for suppliers to be paid, thus the need for an enterprise-centric credit system that would allow companies to get instant payment against products sold. In contrast, their buyers get immediate financing to purchase products on credit with a flexible repayment window.

While every industry has undergone a digital transformation, time-consuming and manual credit approvals remain an impediment for B2Bs, contributing to slow customer onboarding for suppliers and a static buyer ordering process. It can consume a long time to collect the data necessary to complete a credit check, resulting in a drain on company resources and threatening sales if a credit check takes too long. These complexities led to the need for a simplified and accelerated B2B credit process that would help suppliers accelerate cash at reasonably lower costs by moving to an alternative lending model versus a traditional credit card.

Launch of the BNPL Revolution

The Buy Now Pay Later solution provides a seamless purchase experience of transacting online & offline, both while encouraging existing buyers to buy more and attracting new buyers to buy from them. Based on proprietary underwriting algorithms, a closed-loop digital supply chain financing solution utilizes an already proven tech stack to evaluate MSMEs to provide instant credit. Built on innovative technology, the BNPL solution can be implemented in the existing system of enterprises in less than a day with minimal tech dependencies. It enables enterprises to get rid of costlier MDR charges that they incur while providing credit access to their buyers. It adds immense value in transactions where the supplier margins are razor-thin, and even a day’s delay in the billing cycle contributes to higher costs of doing business. It is indeed a win-win scenario for all parties involved in a transaction.

The Bottomline

This solution addresses multiple issues in B2B transactions. It provides instant access to funds for the sellers while providing the buyers enough time to sell to their end customers without worrying about paying for the purchase, thus solving their working capital requirements. On the other hand, it benefits enterprises with an improved conversion funnel while attracting up to 30% of new customers at a 40% higher average purchase value, leading to a 2x increase in overall sales.

This solution is bound to disrupt the B2B credit ecosystem, thus becoming a one-stop shop for any business's supply chain finance requirements. BNPL coupled with invoice discounting, are covering both upstream and downstream in the supply chain and helps as many MSMEs and businesses in the process.

Conclusion

The B2B Buy Now Pay Later solution offers a level playing field to the businesses who have been otherwise deprived of working capital and purchase financing, thus allowing them to increase their focus on other aspects of their business.

The next 2 years are certainly going to be a Big Bang moment for B2B BNPL as this will help grease the trade wheels in the country. Whatever the future is, it’s astounding to muse on how far the B2B payments landscape has come in the past  2 decades. From a space that was once contingent on traditional methods to one that’s now embraced digitization, B2B is going through a transformation by disrupting technology and innovations. That said, the Pay Later proposition may just be the next plausible move for B2B payments.