How to Offer Buy Now, Pay Later for Business & Get Faster Payments
Buy now, pay later (BNPL) has been a popular payment method for B2C purchases for years. Now it’s an option for businesses with B2B customers as well — creating a win-win for both buyers and sellers.
A buyer can acquire the products and services their business needs, deferring payment for 30 days or spreading it out in installments for up to 12 months. Meanwhile, a seller can get paid faster and increase their average order value.
Take a deeper dive into how B2B BNPL works, its benefits, which industries can derive the most value from extending it as a payment method, and how to offer buy now, pay later for business.
What Is BNPL for Business?
BNPL for business is a B2B payment option that allows customers to purchase goods or services immediately but pay in installments. Here’s how it works:
A business (the seller) partners with a buy now, pay later provider to offer BNPL as one of their payment solutions.
A customer (the buyer) chooses BNPL from the available payment methods on their invoice or via the merchant’s e-commerce portal. For example, they may have the option of paying with a credit card, a check, a digital wallet like PayPal, or through a BNPL service.
The buyer fills out a brief application that’s integrated into the seller’s checkout process, receiving an instant approval decision and payment terms offer.
The buyer agrees to the terms and the installment payment plan.
The seller receives the full amount upfront from the BNPL provider.
4 Benefits of Offering BNPL to Customers
Are you considering offering BNPL to your B2B customers? Check out the high-value benefits you can expect — from faster payments and larger orders to less risk and greater customer loyalty.
1. Faster Invoice Payments
Do you experience cash flow gaps while waiting for customers to pay their invoices? A BNPL payment option can help you reduce your days sales outstanding and receive money faster.
Perhaps you extend net 30, 60, or 90 terms to your customers, or you frequently receive late payments. Both can lead to uneven cash flows. However, with BNPL, you can get paid immediately while giving your customers access to net 30 terms at 0% or an installment plan.
Not only do you get paid right away, but it’s a win for your customers too. With access to a payment plan when they can’t cover the full amount of an invoice on time, they avoid racking up late fees.
2. Higher Conversions and Average Order Value
There are two ways to boost sales with buy now, pay later options: through better conversion rates and higher average order values (AOV).
A successful sale comes from “solving your customers’ most pressing pain points,” according to an MDM article on the human side of selling. In addition to fulfilling a customer’s needs with your products and services, think about what they need to say “yes” to your sales pitch.
When you’re close to a sale and a customer’s only barrier to purchase is their limited cash flow, BNPL gives them a way to get the product or service they need while spreading out the expense over a longer period of time. Adding this frictionless financing option to your checkout process might just be the clincher to close deals and boost conversion rates.
In addition, a BNPL option can increase your average order value. With a flexible payment method at their disposal, customers have more purchasing power to place a larger order — perhaps to take advantage of a limited-time offer or a bulk discount. In fact, you may be able to increase your AOV by over 250%.
3. Lower Accounts Receivable Risk
When you offer net 30, 60, or 90 payment terms, you’re essentially providing your customer with short-term interest-free financing. You’re assuming credit risk like a lender would — but without the same protections.
When you use a BNPL financing option to underpin extended payment terms, the buy now, pay later service provider takes on the risk instead of you.
4. Better Customer Loyalty
You have a top-notch product or service, which is the foundation of customer loyalty. It’s only one of the drivers of loyalty, though. Providing a seamless and frictionless customer experience is also important.
Part of this customer experience includes your buying process and payment flexibility. If you wow customers throughout the journey, it’ll encourage repeat purchases and potentially boost a customer’s lifetime value.
The Industries Where BNPL Adds Value
The industries where buy now, pay later options add particular value include:
Wholesalers
Distributors
Manufacturers
Service providers
However, any business with B2B customers — especially those who serve small businesses with tighter budgets — can benefit from offering a flexible payment option like BNPL.
How to Offer Buy Now, Pay Later for Business
To offer a BNPL option to your B2B customer base, you’ll need to partner with a provider like BackdPayments.
Once you’re set up, you can easily integrate the BNPL payment option across all your sales channels. That means it’ll be available to use in-person at a point of sale, via online checkout, or on an invoice. You can even share a custom application link through email or QR code.
Lengthy credit applications can slow down the process, so BackdPayments keeps things moving with instant credit approvals up to $50,000* and soft credit checks that won’t impact your customers’ credit scores.
B2B Buy Now, Pay Later FAQs
Still have questions about B2B BNPL? We’ve got the answers!
How Does BNPL Benefit Merchants vs. Net Terms?
Both net terms and BNPL can benefit merchants with the right financing partner.
When you offer traditional net terms without the support of a financing partner, it’s like offering your customers an extended interest-free payment period. It’s a great sales tool to help attract customers and close deals, but it puts a strain on your cash flow.
If you offer net terms with the support of a partner like BackdPayments, you’re able to give your customers extended due dates without the risk. Plus, you’ll get paid instantly instead of waiting for the payment to clear in 30-90 days.
With BNPL, you can still offer extended repayment options while receiving full payment much earlier. However, your customers can receive up to 24 months to pay via an installment plan.
Working with a financing partner is a win-win for both merchants and their customers.
Do Merchants Pay Fees for BNPL?
Yes, sellers who extend BNPL as a payment method will be charged a simple transaction fee by the buy now, pay later provider. It’s usually no more than the fee you’d pay to accept a credit card payment.
Is BNPL Only for B2C, or Can B2B Use It?
No, BNPL isn’t only for B2C. It can be used for B2B as well by partnering with a provider that supports B2B transactions.
Buy now, pay later rose to popularity in retail through B2C providers like Afterpay. But now, providers like BackdPayments offer the same convenience and flexibility to B2B companies across a variety of industries.
Offer Extended Payment Terms Without the Risk
Buy now, pay later allows you to offer seamless, flexible payment options to your B2B customers. You can extend net 30 terms or installment plans without having to take on the credit risk. It increases your customers’ purchasing power and keeps your cash flow humming along — a win-win situation!
Ready to offer buy now, pay later to your B2B Customers? Partner with BackdPayments for streamlined integration across all your sales channels. No matter how you close the deal, your customers can easily apply for instant approvals up to $50,000 or request up to $1.5 million in purchasing power.
Sign up for BackdPayments today.
* Decisions and funding may take additional time and not be same-day. Additional information may be required. Time to receive funds varies based upon your financial institution's receiving schedule and operating hours.
