Inside the Briefcase

Webcast: HOW TO SCALE A DATA LITERACY PROGRAM AT YOUR ORGANIZATION

Webcast: HOW TO SCALE A DATA LITERACY PROGRAM AT YOUR ORGANIZATION

Join data & analytics leaders from Starbucks, Cardinal Health,...

How EverQuote Democratized Data Through Self-Service Analytics

How EverQuote Democratized Data Through Self-Service Analytics

During our recent webinar on scaling self-service analytics, AtScale...

How Analytics Governance Empowers Self-Service BI

How Analytics Governance Empowers Self-Service BI

The benefit of implementing analytics policies at the semantic...

How To Create A Powerful SMS Marketing Strategy

How To Create A Powerful SMS Marketing Strategy

Many small businesses are looking for more ways to...

Emerging Frameworks & Technologies that Combat the Rising Threat of Cyber Attacks

Emerging Frameworks & Technologies that Combat the Rising Threat of Cyber Attacks

The creation of the first computer virus in 1971...

Is BNPL About To Change B2B Transactions Forever?

November 23, 2021 No Comments

Featured article by Bernadine Racoma, Content Manager of eTranslation Services

arm 300x200 Is BNPL About To Change B2B Transactions Forever?

Buy now pay later (BNPL) is a payment method many of us have used before. Most people use it for one-off purchases that they can’t afford – some people get carried away with it. It’s a form of credit offered by creditors that means every purchase made is like a mini loan. Miss the payments, and it can affect your credit score.

It’s so popular that 4 in 10 people have used a BNPL later service using companies like Klarna, Clear Pay, and even PayPal has jumped on the bandwagon. Klarna is by far the most popular, with 460,000 active users. Recently, a company called Billie — a major BNPL provider for B2B businesses — gathered an extra $100 million in funding to support their market growth.

Click here to learn how BNPL might change B2B transactions forever.

How BNPL Typically Works

BNPL is a huge trend. Experts predict the market will be worth over $166 billion by the end of 2023. Over the last two years, BNPL has grown over 85%, fuelled by the pandemic and businesses struggling to find the funds to support their day-to-day running. BNPL offers a lifeline for people who need, or want, to make a purchase but don’t have the money available. One survey found the main reason people chose to use BNPL services is that they can spread the cost – and that’s exactly why B2B buyers decide to use it.

The B2B market is much bigger than B2C – it’s worth $1.8 trillion, to be precise. Big businesses are making big transactions, and partnering with a BNPL platform can open up the potential for more customers. Once a purchase happens, the reigns are handed over to the BNPL provider to chase the money. B2B traders get their money instantly – so it’s a win-win situation for you and your customers, as long as they can make the repayments.

How It Can Make A Business More Profitable

A BNPL scheme is more likely to attract businesses who are looking to shop only using BNPL. Many B2B businesses won’t be able to afford to make a transaction in one lump sum, especially B2B startups with little money. These new income streams stimulate people to purchase the big-ticket items they wouldn’t usually go for, and that’s where the benefits come in for a B2B brand.

Plus, these types of payment schemes can tie into reward schemes. There has been a lot of research into b2b sales incentives and their effectiveness, with one study concluding that 75% of B2B buyers favor brands that offer a rewards program. A loyalty program for b2b customers is another incentive to make those all-important big purchases. And, if you can create loyal customers, you’ll find they spend 43% more with you than other brands.

Both BNPL and a robust b2b customer loyalty programme are ways of improving the shopping experience. Consumers always have a problem they need solving, and one common problem is money. Take large payments out of the equation and still offer rewards, and you’re onto a winner.

The Downsides

The only real risks are to your customers.

There are downsides to most things in life, and BNPL comes with its defects – the main downside being the risk for the consumer. Yes, you as a business will always have your money for the transaction, but that doesn’t mean it’s something your consumers can afford – and you’d never find out about it. One recent study in the UK found that BNPL consumers have an average of $563 on credit – but that’s just B2C transactions. B2B transactions are typically much higher in value.

BNPL is definitely revolutionary – allowing people to shop as they have never been able to shop before. There’s conflict as to whether this is a good thing for the consumer as it does promote impulse spending, but for B2B brands, it’s more likely to offer a lifeline to keep the business going. Going back to the pandemic, many brands had no choice but to explore new avenues of financial aid to continue trading – BNPL became that lifeline.

lala 150x150 Is BNPL About To Change B2B Transactions Forever?

Bernadine Racoma is the Content Manager of eTranslation Services. Her long experience in an international development institution and extensive travels have provided her a wealth of knowledge and insights into cultural diversity. She writes to inform, engage, and share the idea of the Internet being a useful platform for communicating, knowledge sharing, educating, and entertaining. You can find Bernadine Racoma at Google Plus, on Facebook and Twitter.

 

APPLICATION INTEGRATION, DATA and ANALYTICS , MOBILE, OPEN SOURCE, SECURITY, SOCIAL BUSINESS

Sorry, the comment form is closed at this time.

ADVERTISEMENT

Gartner