Top Misconceptions About B2B BNPL

Over the past year Buy Now, Pay Later (BNPL) has become quite the buzzword, with this “trend” ultimately making the jump from novel solution to mainstream. BNPL has been increasingly adopted by a growing number of industries. Although most people know BNPL as an offering in the B2C space, it is gaining traction in B2B as well. It’s important that businesses know what’s fact and what’s fiction when it comes to B2B BNPL.

So let’s bust the top B2B BNPL myths!

1- B2B BNPL is the same as B2C BNPL

This is probably the most common misconception about B2B BNPL, but we’re here to set the record straight.

First let’s review the similarities between the two types. Both B2B and B2C BNPL allow buyers to pay off a purchase over an agreed period of time. This means that both consumer and commercial buyers do not have to worry about paying the full value of the transaction upfront.Like the B2C companies, B2B BNPL providers will offer a variety of options from Net Terms, to installment payback.

While offering BNPL to consumers has been seen as quite a novel development in the payment space with the closest existing offering being the credit card, this is not the case for business purchases. Offering agreed terms that provide the buyer the ability to pay for a purchase over time is not a new concept for business buyers and sellers. Net terms are common practice in B2B transactions but are typically limited to the standard of 30/60/90 day offerings, and limited to larger, more creditworthy buyers.

Next consider who the buyers are and their motivation for purchasing. On the consumer side buyers, many BNPL purchases are about items/services for personal consumption. On the B2B side of things, purchases can be for business necessities such as computers to keep day-to-day operations going, or inventory or raw materials that they need for the business to actually function. Improving cash flow as a business is vital, in that without it, it’s quite challenging or even impossible for the business to run.

2- Vendors are responsible for defaulted payments

It's reasonable that a supplier or vendor limit their credit offering to larger and more credit worthy buyers, as they are often not equipped to underwrite the risk.  The good news is: when using tabit, sellers can eliminate all risk and administrative tasks that come along with offering credit.

3- BNPL is only for Millenials and Gen Z

While Millennials and Gen Zs are certainly innovating the payment landscape and have been the early adopters of BNPL on the consumer side. Technology and trends do not exist in an isolated bubble. Like any other technology BNPL is beginning to disseminate across age groups, gaining universal traction. Business buyers are consumers outside of working hours, so the trend of a growing demographic using BNPL in consumer industry will translate to business.

4- BNPL only works for traditional retail businesses

In the same way that B2B BNPL has expanded into increasingly more industries such as travel, insurance, and even healthcare, the options on the B2B side are not as limited as some might think. Although B2B e-commerce is leading the way for BNPL as it is a simple integration, the omni-channel approach will soon allow businesses to offer BNPL through all channels including in store, telesales, online, etc.

Regardless of the industry, the choice of flexible payment options and improved cash flow is always a win.

5- It’s complicated to implement a B2B BNPL solution into my e-commerce setup

For all the benefits that integrating a B2B BNPL solution like tabit into your strategy brings, it’s only natural to think that getting it set up would be complicated, time-intensive and laborious. Fortunately, the majority of BNPL solutions can be integrated with relatively generic API documentation, which is readily available.

We offer two integration options for businesses:

  1. Tabit can be integrated with any existing e-commerce platform that your business is already using such as Shopify, WooCommerce, BigCommerce, etc.
  2. If you have a custom commerce platform built in-house, we offer readily available API Documentation that can be leveraged by your development team. Or, our team can work directly with you to customize your integration.

Regardless of which option you choose we’ve made sure to keep things simple to enable you to get set up and immediately start offering tabit to your business customers.

6- My current e-commerce setup runs fine as is, I don’t need a B2B BNPL solution

Even if your current setup is functional, buyer and seller preferences are changing, and no business should ignore that. Consider the benefits to yourself as a business buyer, and the benefits to your business buyers.

With the current uncertainty in the economy, offering payment flexibility to your buyers will go a long way. The benefits are not one sided. Sellers are able to increase their Average Order Value (AOV) as well as the frequency of purchase when offering BNPL.

No more worrying about the time, effort and risk that comes with offering customer financing.

There you have it! B2B BNPL is its own unique offering, with specific benefits to business buyers and sellers, but across all aspects it’s about optimizing and improving the checkout experience. So if you’re curious or ready to get started offering a B2B BNPL solution, get in touch with us and put it on our tab!

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Andrea is a Communications and Brand Specialist focused on making complex topics easy to understand for all types of readers, and creating visually engaging material. While she calls Montreal home, with a passion for travel, she spent several years living in Santiago, Chile. In her spare time you'll find Andrea outdoors on a spontaneous adventure or indulging in a TV marathon equipped with ample snacks.