Myths, facts, and what to know about B2B buy now, pay later

Extending credit online through net terms, also known as B2B buy now, pay later, can set your ecommerce business apart dramatically. Within reason, there are tons of B2B BNPL out there. But from the surface, they all look pretty similar. So whether you need net 30, 60, or 90, how do you choose the right provider for your business and upgrade your customer experience? In this blog, we'll walk through a list of common misconceptions that can help you avoid falling for a subpar BNPL provider. So your customers always get your best. 

First, what are net terms?

Net terms are a way for businesses to buy now and pay later. In an offline way, net terms have been around for a long time. With high transaction values, most businesses simply don't have the cash upfront to cover the purchase. Even if they did, it's a common practice to try and speed up the collection of cash from sales and delay paying vendors as long as possible. The tricky thing is offering terms in a digital and seamless way.

That's why B2B buy now, pay later has come at the perfect time for B2B ecommerce. But some BNPL providers are slow to qualify buyers and don't offer the kind of flexibility merchants need. Because offering terms digitally is still a relatively new thing, there's still not a lot of information out there on what the "right" solution looks like. We wanted to expose three prevailing myths that might be standing in the way of BNPL adoption.

Myth #1: It doesn’t matter if they have their own credit risk team to approve net terms

Being able to extend credit has been an expectation of the B2B market for hundreds of years, but few companies have the resources to extend credit online. The businesses that do offer credit online today are often held back by slow, tedious processes. It can take them days or even weeks to approve buyers for net 30 payment terms.

Essentially, merchants typically turn to banks and other legacy financial institutions to fund the transaction, but these organizations need to qualify and update credit limits manually. Plus, they don’t have the infrastructure to perform a truly nuanced assessment. Companies dedicated to B2B ecommerce payments, on the other hand, manage credit risk themselves. So they have the benefit of evaluating buyers across several different industries, business models, and transaction values. By leveraging historical transactions from a network of merchants and building that expertise into risk models. The result? Faster and more accurate approvals.

Myth #2: You don’t need a branded payment solution for B2B buy now, pay later

In B2C, BNPL solutions are often handled and branded by the separate provider. But for buy now, pay later in B2B, building trust is absolutely critical. B2B buyers are making large purchases, and they often face a series of approvals and several logistical hoops before they can even hit ‘buy’. A digital journey that doesn’t engender trust can jeapordize conversion.

For example, there are a lot of B2B buy now, pay later solutions that are not white-labeled. Inserting an obscure third-party logo in your payment flow can confuse your buyers and jeopardize sales. After all, B2B buyers are buying on behalf of their business – the stakes are much higher. Ideally, you should be able to extend terms from your own platform with your own logo, which your customers easily recognize and trust. If you can pre-qualify buyers too, then they can shop seamlessly and check out with terms in one-click. Offering that kind of superior shopping experience is the key to building loyalty and confidence.

Myth #3: Payment options can be an afterthought 

B2B ecommerce is a game of convenience, and if customers can’t get the flexibility they need, they will take their business elsewhere. Financing options are the first step. But how customers get to pay for their invoice can’t be overlooked. Although there are a variety of B2B buy now, pay later solutions that do offer net 30 terms in the checkout, merchants still have to process payments themselves. 

If your buyers have reached the checkout only to realize that they can’t use their preferred payment method, there’s a high probability that they’ll bounce. If you select a BNPL financing solution that also processes ACH, wire, and check, the benefit is two-fold: your customers get a better experience and your resources don’t have to go towards building the infrastructure. 

The time for B2B buy now, pay later is now

The idea behind digital net 30, 60, 90 terms is simple, but buyer expectations are sophisticated. If you want to truly scale, attention to details pertaining to the customer experience is key. Settle on slow approval rates or a cumbersome UX, and few customers will make it over the finish line. A smooth and consumer-like experience, well, that’s value they can’t turn down.