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BNPL in the B2B Sector: Evolution & Key Opportunities Explained

Boaz Gam

Boaz Gam


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Article content
  1. How Has COVID-19 Influenced BNPL Services?
  2. Top 3 Driving Forces of B2B BNPL Growth in Post-Pandemic Times
  3. Bottom Line: Why Is the Future of BNPL in B2B?

Tapping into the B2B Potential of BNPL Services

Buy Now, Pay Later (BNPL) services are currently experiencing their golden age, with the global total payment volume reaching a staggering $309.2 billion. What’s more, the interest toward them is forecast to continue growing, as the number of BNPL users worldwide is set to double, hitting 900 million by 2027, and the industry’s overall size is anticipated to sum up to $3.7 trillion by 2030.

Yet, despite these promising figures, BNPL providers are also encountering challenges, including stock market declines, tightening regulations, and profitability struggles. These factors raise concerns, with the main question being: “Is this business model viable in the long term?”. The answer to it could lie in the potential offered by B2B transactions. Keep reading to learn more!

How Has COVID-19 Influenced BNPL Services?

Tapping into the B2B Potential of BNPL Services

The global pandemic has reshaped how consumers handle their money in many ways, from the reduced use of cash to the increased interest in BNPL services. However, it also underscored the importance of flexible payment options for the B2B sphere, causing disruptions in the supply chain, delaying payment processing, and placing a financial strain on numerous businesses.

In other words, the possibility of splitting payments gave companies a chance to stay afloat while navigating the unprecedented impact of the COVID-19 pandemic. This was especially true for SMBs in spheres like travel, hospitality, retail, and entertainment. What’s more, it was also crucial for companies that needed to buy stock and materials in such niches as manufacturing and healthcare.

Moreover, B2B BNPL has proven to be advantageous for both buyers and sellers. While the purchasing side enjoyed extended and flexible credit terms, merchants offering “Pay Later” products benefitted from receiving full upfront payments.

These BNPL benefits for the B2B sector accelerated its adoption during the pandemic years, and this upward trend doesn’t seem to be going anywhere in the foreseeable future.

Top 3 Driving Forces of B2B BNPL Growth in Post-Pandemic Times

While BNPL in the B2B sphere has achieved unprecedented heights during the COVID-19 outbreak, it still offers plenty of untapped potential. Here are some of the key factors currently driving new developments in this sector and increasing B2B BNPL adoption:

1. Active Digital Transformation

Tapping into the B2B Potential of BNPL Services

Following the pandemic years, the B2B sector is continuing a rapid digital transformation. In fact, 96% of European B2B buyers claim to prefer an end-to-end, digital self-serve model for their purchases. Besides, 73% of B2B buyers are millennials who favor online transactions.

These figures showcase the fact that since B2B buyers and sellers have experienced the security, simplicity, and convenience offered by online transactions, they are highly unlikely to revert to traditional methods. This tendency is also supported by both traditional financial institutions and emerging fintechs rolling out diverse digital payment solutions.

This is particularly noticeable in the BNPL niche, where such innovative features as personalized financial dashboards, seamless ERP system integrations, and collaborative payment plans arise.

2. Intensifying Competition

Tapping into the B2B Potential of BNPL Services

As the demand for online B2B trade grows, so does the competition in this sphere. Thus, sellers are seeking strategies that will help them stand out. One effective way of achieving it is the provision of innovative payment options, such as BNPL.

In fact, merchants who implement BNPL solutions tend to experience a nearly 40% surge in conversions and a 24% increase in purchase frequency from business customers, which makes it a tactical move with high ROI potential.

3. Increasing Focus on Customer-Centricity

Tapping into the B2B Potential of BNPL Services

Just like modern consumers, companies nowadays are no longer willing to tolerate complex purchasing experiences via questionable ordering platforms. To meet these evolved expectations, sellers need to prioritize personalization, convenience, and responsiveness in their offerings.

B2B BNPL services cater to these needs well, as they enable seamless and user-friendly payments. After all, to make a purchase via BNPL, a business needs to follow the same simple process as they would with any other state-of-the-art payment method.

What’s more, the data generated through B2B BNPL transactions can be utilized for analytics, helping sellers better understand their customers, anticipate their needs, and optimize their products and services accordingly.

Bottom Line: Why Is the Future of BNPL in B2B?

Tapping into the B2B Potential of BNPL Services

While the B2B and B2C segments feature distinct purchasing behaviors and market dynamics, both of them present plenty of opportunities for BNPL. Yet, many agree that the future trajectory of BNPL development leans toward B2B trade.

This is mainly due to the fact it’s a largely untapped territory for such services, especially in contrast with a highly saturated and homogeneous consumer market. It is clearly illustrated by the fact that despite B2B credit terms being a necessity, only 1 in 5 of the B2B marketplaces that incorporate payment options offer a modern BNPL alternative.

Besides, the B2B sector also deals with higher transactional values than the B2C one, is more than three times larger, and is growing at twice the speed. This makes it more resilient to economic fluctuations and offers more scalability potential. With these factors in mind, it is clear to see why the B2B market is a promising arena for payment innovation in general and BNPL in particular.

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