Buy Now Pay Later B2B: how does it work?

A booming B2B market

Although the digitalization of payments has been underway for several years now, it was the health crisis that really confirmed this trend and explains the growing popularity of payment methods. online and payment facilities. At the same time, they are helping to alleviate the financial problems caused by the health crisis. The BNPL model was born precisely in this context of ongoing fintech innovation, with a clear objective: to optimize payment for B2B customers and offer omnichannel solutions.

In France, the deferred payment market could reach 10 billion euros by the end of 2021, according to expert estimates, versus 6 billion euros in 2019. It's a success story that's had an impact on both the B2C sector and the B2B ecosystem. And for good reason: the pandemic has been a factor in accelerating the business model. Buy Now Pay Later which allows customers to place their orders now and pay later, making traditional payment methods virtually obsolete.

How the system works Buy Now Pay Later ?

The BNPL principle is simple: the B2B buyer orders now, but pays later. They can choose to pay in instalments (three or four times), as offered by Hero (link to product page) or deferred payment.

The company, on the other hand, is paid directly, as it is the service provider who fully assumes the risk of non-payment and late payment. The latter can also recover all receivables from customers in the event of non-payment. It's a risk-free model for companies, with many advantages:

• rapidity : the system Buy Now Pay Later meets a growing demand for immediacy on the part of both B2B customers and the companies themselves. Transactions are becoming faster, and fractional payments enable B2B e-merchants to be paid directly, without any impact on their cash management.

• flexibility : The lack of diversity in payment methods is a real obstacle for B2B customers. To guarantee a good customer experience, it is therefore essential to offer a range of payment solutions, including fractional and deferred payments. They provide B2B customers with much-appreciated flexibility and enable them to reach a wide target audience.

• safety : Faced with the alarming phenomenon of data piracy and other computer attacks, B2B buyers are now demanding ultra-secure transactions. BNPL is the answer to this major challenge.

• late payment management : BNPL helps to avoid the late payments and transaction problems that plague the B2B sector. Since order volumes are higher than in B2C, the slightest error can lead to dramatic losses and cash flow problems.

The model Buy Now Pay Later is profoundly transforming the B2B payment ecosystem and responding to new needs. For the majority of market players, the increases are exceptional and can even be as high as 48% increase in sales . All of which goes to show that BNPL represents a model for the future of the B2B sector, and that it's not too late to jump on the bandwagon!