Pay by Invoice in the B2B sector
Updated: Mar 16
Over 90% of all business customers state that Pay by Invoice is their favorite payment method. That being said, it is surprising that the most prominent B2B payment method is still not extensively adopted in most B2B web shops. In particular, only 45% of retailers offer invoice payments despite its popularity.
In this blog article, we will analyze the reasoning behind the slow adaption and find out why integrating B2B invoice payments in your webshop will provide you with the conversion boost that your company deserves.
What is Pay by Invoice? - Definition
Pay by Invoice, also known as invoice purchasing, is a widely used payment method across all of Europe. It allows buyers to obtain goods or services immediately and pay at a later date, as determined by the invoice purchase provider.
In B2B transactions, invoice purchases are particularly desirable, with 90% of B2B buyers indicating their preference for this payment method when shopping online. Despite the complexity of the backend process, webshops must offer a range of options, including invoice payment, to meet the expectations of today's customers, who demand a B2C-like shopping experience.
Therefore, companies that fail to offer this method in their online shop may miss out on significant sales revenue. Ultimately, Pay by Invoice is a convenient and popular payment method for both private and business customers alike, making it an important consideration for businesses looking to enhance their payment processes.
Pay by Invoice in B2B & B2C - What is the difference?
Generally speaking, Pay by Invoice is common in both B2B and B2C transactions. In both cases, the merchant creates an invoice for the buyer (private customer/company) and agrees with him on net-payment terms. Nevertheless, the theoretically easy process gets complicated when offering the payment method to business customers.
B2C invoice payments - straightforward and easy to manage
Offering Pay by Invoice in the B2C sector is relatively simple and straightforward. Customers receive the goods or services immediately and pay for them at a later time, usually within a few weeks.
Payment approval and settlement times are minimal, taking only a few days. Furthermore, the average shopping basket is mostly in the three digits and the risk of default is not as severe as in the B2B market.
B2B sector: The risk of letting businesses Pay by Invoice
On the other hand, in B2B transactions, Pay by Invoice is more complicated due to several factors. One of the main reasons is the different responsibilities between the person who purchases on behalf of a company and the entity who pays for the purchase. In B2B, this often results in transactions taking longer, as the buyer may not have access to the company's payment details.
Another significant factor is the higher invoice amounts. The average shopping basket in B2B transactions has four digits, compared to three in the B2C checkout. Subsequently, the payment method's design, choice, and fees are different due to the higher risk.
Furthermore, B2B companies work with various corporate structures, adding to the complexity of B2B payments. B2B webshops must master the ability to offer invoice payments to as many as 14 different types of companies or legal forms, presenting challenges for user identification and risk management.
Finally, B2B Pay by Invoice usually involves a higher risk for the supplier than in B2C. Due to the higher invoices, it is of great importance that suppliers check the creditworthiness of the company that wishes to buy on invoice in advance to prevent fraud and credit risk.
Advantages of B2B payments - The breakthrough for your online store
B2B payments can make or break your online store's success. Offering the right payment options is essential to create a seamless and convenient shopping experience for your customers. B2B online stores must consider the unique requirements of their business customers, and make sure to include the most preferred option on the market.
To be precise, including the preferred payment method among 90 percent of business customers both comes with advantages for B2B buyers and merchants.
B2B Buyer - Advantages of Pay by Invoice
Cashflow: Businesses can receive goods when they need it, even if they are currently short of money. The invoice can be paid within the specified period without affecting their cash flow.
Data security: There is no need to provide banking information, linked to personal data, directly to the merchant.
No risk of paying for bad quality: Payment is only made once the goods are received and meet the buyer’s expectations. If there is a problem, the goods can be sent back without payment.
Advantages for B2B merchants
Higher revenue: Invoice payments can increase shopping basket size (average order value) by more than 50%, increasing buyer purchasing power.
Higher conversion rate: Pay by Invoice increases conversions and incentives quicker purchasing and more frequent ordering.
Higher customer satisfaction: B2B buyers want the convenient and seamless shopping experience of a B2C checkout. A smooth Pay by Invoice method will increase satisfaction and loyalty across your customers.
Pay by Invoice in your online store
As a B2B online retailer, it's essential to offer your customers a seamless payment experience that meets their needs. Pay by Invoice is the most popular method among B2B customers, with up to 90% of business customers preferring it. That's why Sprinque offers Pay by Invoice as an option in your online store to help you increase customer satisfaction, conversion rates, and sales.
Fully integrated into your B2B webshop
With our API-integrated checkout platform, customers can select to pay-by-invoice in just a few clicks and complete their purchase. To make it easy for your business case, we offer existing integrations for various store systems such as Magento, PrestaShop and WooCommerce. Nevertheless, our team is also available to build the integrations for other store systems and helps you with setting up our payment platform tailored to your current setup.
Real-time approvals - Risk assessment in <2 seconds
With the help of our international network of data sources, we can verify businesses across Europe, screen them for fraud and assess their creditworthiness. With an acceptance rate of over 90%, we assign the approved buyers a revolving credit limit to start purchasing right away.
Transaction and Payments - Single click purchase, immediate payout
After the approval of the buyer, he can simply select to Pay by Invoice, we authorize the transaction and handle all the complexity of managing the credit limit. Sprinque pays you out 100% immediately, you have quick and secure liquidity, giving you the freedom to plan investments and make advance payments for new orders without worrying about your cash flow.
Collections and dunning process - We take care of it!
Sprinque handles the full dunning procedure if a consumer pays late or not at all despite passing the risk assessment. Without your involvement, the dunning procedure is carried out according to your specifications. You won't be responsible for any additional charges; Sprinque will pay for the costs of dunning and any prospective collection procedures.
Additionally, our flexible settlements allow you to pick when you'd like to get paid for the transactions handled by Sprinque.
Sprinque: The right invoice payment method for your B2B webshop
Since Sprinque's B2B invoice buying is totally automated and digital, outsourcing your invoices will help you save time and resources. Please contact us via email or book a demo with us below, if you have any concerns about B2B payment methods or if you'd like to add Pay by Invoice as a payment option to your online store so that our B2B experts can provide you with personalized advice.
You can give your clients a simple payment experience and advance your online store with Sprinque, the most flexible B2B payment platform in Europe.
Book a demo to understand how Sprinque can help you