B2B vs B2C Buy Now Pay Later: Two Sides of the Same Coin

by Kieran Daly
August 4, 2023
B2B vs B2C Buy Now Pay Later: Two Sides of the Same Coin

The world of finance is in a perpetual state of flux, continually adapting to meet the evolving needs of businesses. One such innovation that has gained popularity is Buy Now Pay Later. Originally catering to consumers in the B2C market, Buy Now Pay Later has now extended its benefits to business owners, empowering them to accelerate their growth and expand their operations. At the forefront of this exciting transformation is BackdPay, our groundbreaking product that redefines B2B Buy Now Pay Later.

Let’s take a look at Buy Now, Pay Later and how it works in both the B2C and B2B markets, as well as take an in-depth look at how Backd’s newest embedded finance solution will revolutionize the way you do business. 

Types of Buy Now, Pay Later

What is B2C Buy Now, Pay Later?

B2C (Business-to-Consumer) Buy Now Pay Later refers to a payment model that allows consumers to purchase goods or services immediately and pay for them in installments over time. It is a type of financing option offered by businesses to their customers, particularly in online retail.

The Buy Now Pay Later model eliminates the need for consumers to make full upfront payments at the time of purchase. Instead, customers can choose to split the total cost into multiple smaller payments, usually over a fixed period, without incurring any interest or fees.

Here's how B2C Buy Now Pay Later typically works:

  1. Selection of Buy Now Pay Later Option: When making a purchase on an online platform or during the checkout process, customers are presented with the option to use a Buy Now Pay Later service as an alternative payment method.

  2. Approval and Setup: Customers who opt for Buy Now Pay Later are typically required to provide some personal information and undergo a quick approval process. This process may involve a soft credit check or assessment of the customer's creditworthiness.

  3. Payment Schedule: Once approved, the customer receives an overview of the payment schedule, which includes the number of installments and the due dates. Installments are often spread over several weeks or months, depending on the specific terms offered by the Buy Now Pay Later provider.

  4. Payment Authorization: At the time of purchase, the customer is only required to make an initial payment, such as a small percentage of the total cost or the first installment. The remaining payments are automatically charged to the customer's chosen payment method (e.g., credit card or bank account) on the agreed-upon dates.

B2C Buy Now Pay Later services have gained popularity in recent years due to their convenience and flexibility. They offer consumers the ability to make purchases they might not be able to afford outright, without incurring interest charges, as long as they make the scheduled payments on time. However, it is important for consumers to carefully manage their spending and ensure they can fulfill their payment obligations to avoid late fees or negative impacts on their credit scores.

What is B2B Buy Now, Pay Later?

B2B (Business-to-Business) Buy Now Pay Later is a payment model similar to B2C Buy Now Pay Later, but it is designed for businesses rather than individual consumers. It enables businesses to purchase goods or services immediately and defer the payment over time in installments.

In a B2B Buy Now Pay Later arrangement, a business can acquire necessary supplies, inventory, or services without having to make a full upfront payment. Instead, they can spread the cost over a predefined period, making regular installments.

Here's how B2B Buy Now Pay Later typically works:

  1. Agreement Setup: The business and the Buy Now Pay Later provider establish an agreement that outlines the terms and conditions of the Buy Now Pay Later arrangement. This includes the repayment schedule, interest rates (if any), and associated fees.

  2. Purchase and Financing: When the business needs to make a purchase, they can choose the Buy Now Pay Later option as a payment method. The Buy Now Pay Later provider covers the cost of the purchase to the supplier, allowing the business to receive the goods or services immediately.

  3. Repayment Schedule: The Buy Now Pay Later provider sets up a repayment schedule with the business, specifying the number of installments and their due dates. These installments can be weekly, bi-weekly, monthly, or customized based on the agreement.

  4. Payment Authorization: The business is required to make an initial payment at the time of purchase, typically a percentage of the total amount. Subsequent payments are automatically deducted from the business's designated bank account or credit card according to the agreed-upon schedule.

B2B Buy Now Pay Later offers several benefits to businesses. It helps with cash flow management by providing more flexibility in payment timing, allowing businesses to conserve their working capital. It can also enable businesses to procure necessary supplies or inventory when they need it, even if they do not have immediate funds available.

It's vital that businesses carefully consider the terms of their B2B Buy Now Pay Later arrangement, including any interest rates or fees involved, to ensure it aligns with their financial capabilities and goals.

BackdPay: The newest innovation of B2B Buy Now Pay Later

The landscape of finance is perpetually evolving, with new products and services being offered every day. It’s no surprise that Buy Now Pay Later has already started to shift and adapt from helping consumers in the B2C market to helping business owners expand their own businesses exponentially through the benefits that come with it.

At Backd, we’re proud to be a part of the next wave of innovation in Buy Now Pay Later with our new product, BackdPay. 

BackdPay is the new way to pay, allowing you to offer your clients with flexible financing while still allowing your business to be paid upfront. Yes, you read that right, you get paid instantly at the time of purchase. 

With BackdPay, Backd will provide you with the full payment while your clients make their scheduled payments to us. We’ll handle all the necessary credit checks and better yet, we’ll even reward you for offering flexible financing to the small business community by paying you up to 1% in referral fees for each funded purchase. 

Don’t wait to offer flexible financing, sign up and start offering BackdPay today.

What would you do with the right amount of capital?

Working Capital Advance

Easy payment structures offer amounts with fast turnaround, Simple and easy process to access working capital.

  • Flexible - no collateral required
  • $10K - $2M
  • Terms up to 16 months
  • Automatic daily or weekly, or semi-monthly payments

Business Line of Credit

Get instant access to revolving credit with unlimited terms, and the best rates for your business.

  • Draw funds anytime
  • $10K - $750K
  • Unlimited terms, incredible rates
  • Soft credit pull that doesn't affect your credit score