BNPL in B2B trade: how expanding to offline transactions benefits buyers and sellers alike

Thanks to BNPL, B2B e-commerce is looking more and more like its B2C counterpart, with the option to set up deferred or flexible payment quickly and efficiently at checkout. Credit insurers such as Allianz Trade provide critical elements in BNPL mechanisms: instantaneous credit risk analysis, and securing the risk taken by the merchant or the BNPL provider in offering deferred payment, or the option to pay in instalments (depending on their model).

Let’s explore the benefits of BNPL, and how their expansion into offline B2B transactions can support companies’ business goals and improve their customers’ experience. 

With BNPL, sellers (or merchants) can offer deferred or flexible payment terms to their customers without taking on additional risk, since the insurer protects them from non-payment risk. Buyers benefit from paying in installments or at a later date, giving them flexibility in their cashflow management. This is all made possible by real-time credit risk assessments and our powerful in-house credit risk analysis capacities.

As with any other financial transaction system, BNPL solutions have a number of built-in security protocols, from account authentication to fraud protection. Consequently, and together with conventional KYC checks and best practices, BNPL transactions are simpler and faster, and just as secure as traditional wire transfers. 

BNPL was first developed to allow merchants to grant flexible payment terms to their buyers online. But this same system works in an offline environment as well, such as a brick & mortar shop where customers come to buy supplies.

At the in-store checkout, buyers have the option to pay the basket total in full, or to set up deferred payment when a BNPL solution of the kind that our fintech payment partners provide has been integrated in the in-store merchant’s payment system. If they choose deferred or flexible payment, they will get an automatic decision regarding the terms, made possible by the credit insurers’ real-time credit risk assessment. When the next payment is due they will receive an automated notification (usually a payment link), and can pay with a credit card or wire transfer.

Let’s take an example we are all familiar with: builders need to buy supplies for a renovation project from a hardware store – sometimes several stores depending on their needs. They can go to the stores, pick up the supplies they need, and set up deferred payments at the checkout at each store if their solvency allows. Thanks to a BNPL solution, the hardware stores will be able to offer deferred payment, which attracts more clients, without taking on any nonpayment risk. Deferred payment suits the builders better, since they’re being paid in installments for the renovation project. All in all, a win-win situation.