Four ways BNPL can unlock your business’s e-commerce revenue potential

Buy Now, Pay Later (BNPL): it’s a consumer financing model that’s become indispensable to the success of business-to-consumer (B2C) websites. By offering consumers the prospect of deferring their payments – at no extra cost to them – retailers can dramatically boost e-commerce conversion rates and keep customers coming back for more (as long as customers pass an instant credit check, of course).

It’s a phenomenon that’s now gaining momentum in the world of business-to-business (B2B) e-commerce, where e-merchants still typically require customers to pay in full with a credit card at checkout rather than via the kinds of deferred payment methods – such as net 30 or 60 days – that are the hallmarks of offline B2B trade.

So what kind of capabilities and business advantages give B2B e-merchants the confidence to grasp the BNPL opportunity? Here are four compelling features that are driving BNPL adoption:

1. Real-time, automatic credit decisions

To date, most e-merchants have shied away from providing purchase financing simply because it seems too risky. Their caution is understandable: in many cases, their online channels draw in a much wider set of customers, many of whom they’ve never dealt with before. That’s in sharp contrast to the wholesalers who they’ve built trusted trading relationships with in more traditional, offline business settings.

As a result, when considering the option of offering payment-on-invoice or other terms, they’ve had to weigh the higher risk of non-payment – and the administrative overheads that accompany those – against the benefits of offering BNPL.

The good news is that the challenge is now being addressed by the market leader in trade credit insurance, Allianz Trade. By combining real-time checks on the creditworthiness of B2B customers with robust E-Commerce Credit Insurance API, e-merchants can now offer BNPL with confidence.

Here’s how that looks in practice. Following your internal Know You Customer (KYC) checks, a customer adds items to their basket on your website and requests deferred payment terms. At that point, their financial health is analysed by connecting to our global trade credit risk information database, which contains financial and commercial information of more than 80 million companies worldwide. The speed of that analysis provides automated trade credit decisions so you can instantly offer the most appropriate credit terms to your customer – with confidence. Should you need to receive instant payment to ease your cash flow, Allianz Trade is partnering with BNPL providers that can provide the financing as well.

 

2. Higher e-commerce conversion rates at checkout

There’s plenty of evidence to suggest that an absence of purchase financing for B2B e-commerce customers makes buyers think twice about the timing and affordability of their purchases, especially when contemplating large or complex business transactions. Different estimates suggest that as many as 50% of B2B buyers have abandoned orders at checkout having found that the only option was to pay by card.¹

By implementing B2B BNPL capabilities, backed by E-Commerce Credit Insurance, as many as 90% of your customers are likely to be offered payment terms. And early adopters of Allianz Trade’s solutions for BNPL report e-commerce conversion rates of up to 40%.² The result: maximised revenue opportunities and a boost to your business.

 

3. Fuller checkout baskets and more repeat customers

By offering your B2B customers the option to defer payments, you help to enhance their cash flow and smooth their decision-making processes, often allowing them to commit to more purchases.

BNPL platform companies, such as Two observe that sellers who provide flexible payment options experience an increase in customer orders of 60-75% on average.³ BNPL also results in more repeat customers: two-thirds of buyers typically come back to websites offering BNPL to spend again within a year.

 

4. Peace of mind on payments

When implemented with the right partners, B2B BNPL can enable e-merchants to offer payment terms online without worrying about whether they’ll receive payment – or when.

To meet the needs of businesses, Allianz Trade’s solution can help e-merchants leverage BNPL in several ways, depending on the size of the business and whether it wants to receive payment right away:

• A multinational company can seamlessly integrate a BNPL capability into its online checkout process that automatically assesses the creditworthiness of a customer in real time before offering them payment terms. When the transaction is complete, an Allianz Trade financial services partner automatically pays the e-merchant the total transaction value whilst Allianz Trade steps in in circumstances where a customer is unable to pay, no matter their location. Allianz Trade recently partnered with Two, a pioneer in B2B BNPL platforms, and Santander Corporate & Investment Banking to launch the first global B2B BNPL solution for large multinational corporates.
• For small and mid-sized businesses, the processing and automatic payment can be handled directly by an Allianz Trade-approved BNPL platform provider, such as Two or PausePay, with the business receiving upfront payment and Allianz Trade handling creditworthiness checks and covering the credit period for the platform provider.
• Alternatively, you can simply set up a direct integration between your website and the Allianz Trade BNPL service and start providing customers’ credit terms. If a customer fails to pay, whether it’s due to insolvency, refusal or an inability to pay under the terms of the contract, Allianz Trade will step in and indemnify your losses.

That means your cash flow is safer and more predictable, and you can plan for tomorrow with greater confidence – and the prospect of BNPL-boosted revenues.