Updated: Nov 16
Did you know one of the earliest known By-Now-Pay-Later (BNPL) transactions dates back to 1641? Yep, way before the BNPL became fintech’s golden child, pilgrims used trade credit to manage their finances, repaying London-based creditors in quarterly installments to ease the load. While B2B BNPL has come a long way since its 17th-century launch, the concept remains the same.
What’s more, B2B BNPL’s popularity continues to grow. The B2B BNPL market’s trajectory is so promising it’s now worth $1 trillion. It’s easy to see why. With a turbulent economy and $125 billion B2B spend to manage, merchants are seeking financial stability and payment flexibility with minimal hassle and overhead, creating endless B2B BNPL opportunities.
But the B2B BNPL world isn’t without its flaws. From poor customer experiences to criminals scamming merchants, there’s much room for improvement. To help you get ahead, this article will cover the issues merchants face with B2B BNPL solutions and share a strategy for a successful BNPL partnership.
The great BNPL challenges
Thinking about testing the B2B BNPL waters? Well, before you dive in, it’s important to know the issues you’ll encounter to create a winning action plan. Let’s zoom in on the most common challenges:
A lackluster buying experience kills B2B BNPL adoption
With business purchases being 5-to-10x higher than the average consumer buy and recurring orders common, the threat fraud poses is a big one. In 2022, global online payment fraud hit $48 billion, and the researchers predict this trend will continue.
Worse still, fraud-related vulnerabilities aren’t just costly to businesses' pockets but to their reputations too. So, for merchants to have a fighting chance, their B2B BNPL solution needs a fantastic buyer experience and a bulletproof fraud and risk assessment process in place. Unfortunately, many providers fall short of this hurdle due to slow processes, lax fraud prevention measures, and stringent qualification requirements.
For merchants, these shortcomings only mean one thing: lower conversion rates. It’s a worrying consequence that inhibits progress. Especially when you consider that 74% of B2B buyers would change suppliers if another web shop offered a superior experience, and 92% of buyers would cut ties with a business after two or three negative interactions.
A lack of transparency and brand recognition in the BNPL space breeds distrust
Another issue standing in merchants’ way to BNPL success is the absence of transparency. Buyers often resist adopting BNPL solutions because the merchant hasn't been forthcoming with information surrounding it. Yet, in a market where trust can translate into cash, merchants who lay their cards bare get the lion’s share of sales. So much so a Label Insights study found that 94% of buyers will remain loyal to a transparent brand. Additionally, 75% of these buyers are willing to pay more for goods and services from a brand that is upfront.
Then there’s the fact that the fintech industry is in a state of flux. New players are entering the payments market with varying service levels and social proof. This scenario leaves a lot of room for error, making buyers wary. So joining forces with a B2B BNPL provider that doesn’t have a solid reputation slows down buyer acceptance and, ultimately, sales.
Try before you buy reigns supreme in today’s fast-moving market
Gone are the days of B2B buyers opting for the first payment solution they come across. With more options available than ever, many merchants want to try a payment solution before going all in and connecting their systems through an API. The allure of trial periods is clear. Businesses can reduce their risk and spend while top-tier solutions get the chance to sell themselves and increase conversions. However, not every BNPL solution can offer fuss-free trials, which can be risky for merchants in terms of time spent, risk exposure, and cost.
How to level up your B2B BNPL journey
Although some merchants face trials and tribulations when navigating the B2B BNPL space, there are some moves you can make to skip the learning curve and head towards success. Let’s cover a few:
Learn from your customers, accept feedback, and do something with it
Whether you’re a startup or a large corporation; customers always want to share their thoughts and opinions and expect brands to act on them. This feedback not only plays a crucial role in improving products and business growth but also improves brand perception. In fact, 77% of buyers view brands that ask for and accept customer feedback more favorably.
As a result, buyers become equipped to make the right changes to implement your product and overcome challenges, increasing their odds of success and satisfaction. So allow your customers to challenge your current solution and have a system for gathering feedback continually. Read competitor reviews on similar products and use your findings to iterate your products and services.
Upgrade your fraud prevention tech stack
It it widely known among business owners that "The biggest risk for every business is fraud, with the right tools in place, this can be brought back to a minimum." So ingrain security into your business ecosystem by only using solutions that prevent cyber and fraud attacks. For example, by implementing a reputable B2B BNPL solution like Sprinque, the merchant has the mechanisms in place to offer pay on invoice on net terms to buyers and gets paid by the BNPL provider, who assumes responsibility for the buyers’ invoice. The buyer then gets the time to pay on net terms instead of immediately and repays via the B2B BNPL solution, eliminating risk all around.
Find a B2B BNPL provider focused on your long-term success
The B2B BNPL solution you choose can make or break your customer journey and conversion rates. So it pays to know what a reputable provider looks like. Some characteristics to look for include:
Data analysis solutions: To establish trust and stability in your results, find a provider that uses credible credit data sources. The B2B BNPL solution should also provide insights into the buyer’s history, demographics, and preferences.
Trial options: Select a B2B BNPL provider that allows you to experience the solution in a low-stakes fashion to find your payment match. The trial options should give you an accurate view of what doing business would be like with this solution to decide whether it's the right fit.
Transparent terms and fees: When it comes to change, there is no such thing as overcommunication. Customers need to understand and experience what benefits your product brings to their company, they need to see how it works and how the data they share is being handled. So work with a provider that shares information about their B2B BNPL platform and services freely
Want to learn more about finding your B2B BNPL match? Check out our comprehensive guide.
How Sprinque helps businesses reset their payment journey
If you’re eager to upgrade your B2B payment stack with a BNPL solution, you’ve probably heard about Sprinque. But you might be wondering what we do differently and how we drive results for our customers.
At Sprinque, we’re on a mission to make payments painless. We provide a B2B cross-border checkout solution that automates buyer assessment, decreases operational overhead, and increases business growth. One of the most game-changing features Sprinque has is flexibility. We adjust the solution from merchant to merchant to ensure the right fit. For instance, by assessing buyer data in real-time, Sprinque can provide business buyers with valid recurring credit limits and net terms that are tailor-made for each purpose.
To see Sprinque's business transforming technology in action, take a look at the success story of one of the fastest-growing marketplaces in Central Europe, Refurbed. The team at Refurbed realized their B2C payment stack wasn’t converting many large B2B orders because buyers wanted to pay by invoice with net terms for orders €1000 or more.
Also, as demand continues to rise, Refurbed needed a payment solution that could cover its active markets, provide accurate data and robust processes to manage default risk and fraud, and collect payments. Additionally, Refurbed wanted to eliminate manual processes and complexity while providing a phenomenal customer experience.
It was time for a fresh start. So Refurbed decided to team up with Sprinque, and the switch worked. Refurbed’s time to purchase sped up by 25%, and the average transaction value ranges from €1000 - €65000. Also, Refurbed now boasts a 0% default risk for its B2B arm and serves European markets.
Win with optimized B2B BNPL
Implementing a B2B BNPL solution is a surefire way to stand out from the crowd and uplevel your business results. But there’s a right way and a wrong way to go about your B2B BNPL journey. Remember, selecting a B2B BNPL provider is single-handedly the most important decision to make. So do your research, and try before you buy. Once you’ve found your match, lock in for the long haul and commit to improving your products and customer experience. Take these steps and partner with Sprinque, and who knows, your business could be the next B2B BNPL success story.
Ready to turn a new corner in your payment journey? Get started with Sprinque. Book a meeting today to discover how Sprinque leverages your business success.