BNPL Means Suppliers Stop Waiting for the Check in the Mail

Business-to-business (B2B) payments are the lifeblood of the modern economy. They are necessary for any business that deals with physical goods, from the smallest craft shop needing to purchase needles and thread to the largest technology titan having to buy microchips. B2B payments total $25 trillion annually in the United States and $120 trillion globally. Despite their importance and the potential benefits of automation, B2B payments have yet to undergo the same digital transformation as their consumer counterparts. Many businesses are already overwhelmed with inflation, supply chain issues and unstable economic trends, and they often lack the manpower or money to upgrade systems independently.

Against these headwinds, B2B buy now, pay later (BNPL) options, which apply many of the same principles of consumer BNPL to the corporate space, offer a powerful solution to several problems at once. This payment option could benefit many corporates looking to cut costs, ease their accounting teams’ burdens, improve cash flow and boost the affordability of inventory — thus unlocking long-term growth for their businesses.

The “Buy Now, Pay Later Tracker®” examines how BNPL can simplify and accelerate B2B payments by making them more affordable to businesses.

Around the Buy Now, Pay Later Space

Supply chain problems have led to inventory price increases for many small to midsized businesses (SMBs), forcing them to examine new avenues to increase their margins. For many, implementing BNPL could prove a lifeline, allowing them to make a supplier payment in installments rather than a lump sum. B2B BNPL offers companies the same benefits as consumer-focused BNPL, increasing the affordability of the inventory they need to stay in business.

Supply chain issues, inflation, the war in Ukraine and many other causes have led to a massive cost-of-living crisis in the United Kingdom. Britons have turned to BNPL in record numbers to aid with managing personal finances. A recent study found that £1 in £8 spent online was financed via BNPL, up 10% from the same month last year. One of the primary draws of BNPL for many consumers is a lack of interest payments so long as they pay the installments on time, a critical factor amid a sharp climb in interest rates.

For more on these and other stories, visit the Tracker’s News and Trends section.

How B2B BNPL Helps Suppliers Get Paid On Time

B2B payments can be challenging for businesses of all types, especially those without the capital to make the necessary expensive purchases to run their organizations. Offering BNPL allows these businesses to obtain costly yet necessary inventory essential for day-to-day operations more affordably.

To get the Insider POV, PYMNTS spoke with Neha Raghava, group head of innovation and engagement for Bryant Dental, about how B2B BNPL can help businesses seamlessly afford expensive purchases.

Unlocking B2B Payments via BNPL

Complications run rampant in B2B payments, with small businesses especially struggling to overcome payment delays, cash management challenges and many other issues. While large businesses can deploy tremendous resources and extensive AP teams to brute-force through these obstacles, SMBs are left floundering. New solutions such as BNPL could help level the playing field regarding B2B payments, applying the same principles to the corporate sector that made it so popular for consumer transactions.

This month, PYMNTS examines how BNPL can simplify and accelerate B2B payments.

About the Tracker

The “Buy Now, Pay Later Tracker®,” a collaboration with Splitit, examines how BNPL can simplify and accelerate B2B payments by making them more affordable to businesses.