B2B BNPL Reduces Friction Between Suppliers and Buyers

When the founders of Mickey set out to modernize the commodities industry in 2019, they saw plenty of opportunity for technological transformation.

“If you were to want to go buy lumber, you cannot do it online, you can’t do it without a phone, and you probably can’t do it without a truck,” Mickey CEO and co-founder Alex Rabens told PYMNTS.

With that in mind, the company set out to find people who would want to modernize with it.

On May 3, Mickey announced the launch of its latest business-to-business (B2B) platform: a marketplace that connects lumber producers with manufacturers, builders and other buyers. The platform provides real-time inventories, an automated fulfillment process and an end-to-end purchasing solution.

Related: Platforms, Marketplaces Pave the Digital Path for Better B2B Ecosystems

Eliminating the Need for Suppliers to do Collections

Topping the list of chores a platform can take off suppliers’ hands is collections, Rabens said.

In the lumber industry, as most of the B2B world, sellers typically offer customers terms — and then the customer waits until the last possible day to pay, Rabens said. That can turn something as basic as insisting on payment into a delicate act of diplomacy.

“It’s an odd sort of dynamic because suddenly you’re in a place of collecting payment or following up on payment from someone that you’re also interested in working with again,” he said.

Deploying B2B BNPL to Reduce Friction

Seeking to eliminate such potentially awkward undertakings, Mickey offers B2B buy now, pay later (BNPL), which lets buyers choose when to pay and enables suppliers to get paid instantly.

Its B2B checkout system lets buyers select the amount of time they want to pay — whether it’s upfront or 30, 60, 90 or 120 days. The buyers get the terms they want and pay a little extra if they want time.

“What it does is, it puts both parties in a place where they are generally happier and no longer have to communicate about when payment will be coming,” Rabens said.

Allowing Buyers to Continue Sending Checks

Buyers can pay via ACH or credit card. If sellers are nervous about their buyer churning if they ask them to move to an online payment system, Mickey allows the buyer to continue sending a check and continue getting the same terms. The supplier still gets paid upfront, and Mickey takes the check, cashes it and, if necessary, handles collections.

Buyers that are still sending checks have told Mickey it’s because checks are so ingrained in the way they do things. Others have said that they’re nervous about putting in their ACH information and offering others the ability to draw money from their account.

“There is a feeling of almost like, you are now opting into something that isn’t you writing a check — it’s not as much control or it’s not a fully unilateral move when you do something like that,” Rabens said.

See also: Supply Chain Disruptions Underscore Value of Alliances, Need to Strengthen Payments Relationships

Extending Terms and Enabling Online Payments

Looking ahead, Rabens said he expects that marketplaces will move industries away from the traditional process in which the seller incurs the cost of credit.

“Most of the sellers have had to basically have a credit line just to be able to operate this business because of buyers expecting terms,” Rabens said. “So, the idea that they can now give their buyers the opportunity to not only extend their terms but to pay online is very progressive.”