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BNPL: The new critical success factor for B2B merchants  

Business-to-business merchants – of all shapes and sizes and from all industrial sectors – have been living through a procurement revolution during the past three years.

Propelled by the efficiencies of e-commerce and by pandemic-altered business practices, their customers have been shifting rapidly away from traditional sales channels to digital self-service. And this is by no means just a small-business phenomenon. Around 35% of all B2B purchases by large and mid-sized businesses are now made directly online – and when orders that are agreed virtually are added on top, that figure jumps to around 70%.1

Even in areas where field-sales models have traditionally dominated, such as pharma and medical equipment, in-person interactions have declined sharply. The trend is set to continue as the B2B e-commerce market is expected to soar at a compound annual growth rate of 17% throughout this decade.

And for good reasons. Identifying and researching new suppliers and products online has not only become much easier but undeniably more effective as customers increasingly trust digital channels and their capacity for order fulfillment. In fact, merchants that sell online argue that the wider global markets afforded them by e-commerce create a much more competitive landscape.

Even before Covid-19 changed purchasing patterns, B2B customers (especially those from younger cohorts) were valuing the user experience, the speed, and the convenience of well-structured e-commerce websites. And today, three-quarters (74%) believe that the new web-dominated buying model makes their business more effective.2

It’s not just a question of greater transaction volumes: the amount that B2B customers are willing to spend online is also rising fast. The average order value of B2B customers has almost trebled in the past 10 years to around $1,200- $1,375.3 As management consultants at McKinsey observe: “The most notable sign that digital sales have come of age is the comfort B2B buyers display in making large new purchases and reorders online.”

Despite this rapid growth, the payment experience offered to companies purchasing goods online is far from optimal in several important ways – ways that rival with practices that have underpinned trade for many hundreds of years.

The vast majority of merchants in the B2B space today expect immediate, upfront card payment for new purchases, with only a small fraction able to provide the kind of deferred payment options that are the hallmark of B2B trade – from ‘payment on invoice’ to spread or split payments that mirror traditional net terms.

The anomaly has become even more pronounced as a result of the high-profile rise in recent years of Buy Now, Pay Later (BNPL) in consumer finance, offered by the likes of Klarna, Affirm, Afterpay, PayPal, and some major credit card companies and banks.

The lack of flexible payment terms is keenly felt among your B2B customers. An estimated 95% say they prefer to pay on invoice, yet the bulk of the B2B websites they buy from expect payment in full at checkout.4

In the world of B2B trade, this represents a lost opportunity for merchants. There is plenty of evidence to show that the inability to offer credit to customers causes online buyers to think twice about the timing and affordability of their purchases – especially major ones. Indeed, different estimates suggest that between 30% and 50% of B2B buyers have abandoned orders at checkout, having found out that the only option was to pay by card.4

That situation presents a new competitive opportunity to merchants: many customers are now not only searching online for the product or service their business requires, but also for a related buying package that allows them to defer payment and so help their business’s cash flow.

Such arguments for Buy Now, Pay Later for business are only being amplified by today’s challenging economic climate. Higher inflation and interest rates coupled with slow or negative growth in many economies mean the option of spreading or deferring payments becomes increasingly attractive.

So, what has prevented the widespread adoption of B2B BNPL to date? Above all, merchants are acutely aware that the addition of a BNPL facility might introduce an element of extra risk to transactions: offering deferred or staged payments exposes them to the possibility of late payments or even defaults. When orders are more likely to come from many more unknown entities and unfamiliar territories, such concerns are justified.

At Allianz Trade, we are committed to addressing such challenges. With our E-commerce Credit Insurance, merchants can now propose credit terms to their customers at checkout while protecting their organization’s cash flow and unlocking revenue opportunities. For the merchants who need upfront payments, we have established an ecosystem of B2B BNPL platform specialists and financial service providers that can offer a new generation of solutions specially designed to take the risk out of customer purchases.

The key to such an E-Commerce Credit Insurance facility is great customer experience:

• A B2B BNPL facility needs to look and feel as if it is part of a merchant’s website by providing ‘BNPL as a service’ through an application programming interface (API) that creates a seamless connection to our service.

• To enhance customer experience, BNPL offerings must provide real-time credit decisions at the time of checkout. The real-time assessment of creditworthiness provides the most appropriate payment method as soon as the customer validates their cart.

• And critically, merchants can rest assured that the credit facilities being extended to customers will not impact their cash flow. By backing deferred payment solutions with credit insurance, alongside a BNPL platform provider or a bank, merchants are paid as soon as transactions are executed—with the task of collecting non-payment handled through the expertise and local market knowledge of the credit insurance partner. For your business, that all happens behind the scenes as the credit insurance and payments processes are integrated and automated.

E-commerce credit insurance not only protects your balance sheet from the risk of payment default by providing instant, per-transaction decisions on which customers you want to offer BNPL to, but it also helps you increase your revenues.

Sellers that provide flexible payment options observe that businesses spend on average 20% to 40% more with them, says B2B BNPL specialist Two. And that also results in more repeat customers: 65% typically come back annually.

But perhaps most importantly, B2B e-commerce trade credit dramatically reduces abandoned orders at checkout. 

As the world leader in trade credit insurance, we are always protecting your cash flow, and for those of you who need instant funding of your invoice, we are partnering with major banks and pioneers in B2B BNPL technology in key countries and regions around the world to allow you to turn customers’ expectations for Buy Now, Pay Later into revenue opportunities.

Here is how that might look in practice. As a customer fills their cart on your website, their financial health is analyzed in real-time by connecting to our global databases of business creditworthiness, which contain financial, strategic, and commercial information on more than 80 million companies worldwide. That seamless integration with your e-commerce system and the speed of the analysis provides an instantaneous and robust credit decision—allowing you to offer the most suitable credit terms.

Our solution can help to leverage BNPL in two distinct ways:

• By setting up direct integration between your website and our global network of company intelligence, you can immediately start to offer traditional credit terms, such as net 30 days. We assume the responsibility for collecting any non-payments.

• For multinationals seeking a multi-country, multi-currency BNPL solution, we have created partnerships with financial services providers such as Santander Corporate & Investment Banking. That means the bank automatically pays you the full transaction value as the customer checks out and you don’t have to worry about any non-payment issues – no matter the location of your customer.

Learn more about our B2B E-Commerce Solutions here.


  1. 1. The new B2B growth equation, McKinsey & Co, 2022
  2. 2. B2B sales: Omnichannel everywhere, every time, McKinsey & Co 2021
  3. 3. B2B average order value, Sana Commerce and Forrester Research
  4. 4. ibi Research, quoted at and Billie
  5. 5. B2B cart abandonment, Biller, 2022