Published 6th March, 2023
The growth of B2B buy now pay later solutions has become undeniable. B2B BNPL players across Europe (and further afield) have sprung up to eradicate the all too familiar pain points of net terms for sellers. More specifically, the drawbacks of offering trade credit can and will become a thing of the past thanks to developments in embedded finance, credit risk offloading, and payment reconciliation to help increase B2B sales across the board.
B2B commerce has lagged behind the payment innovations enjoyed by consumers in the last two decades, spurred on by the likes of Klarna, Afterpay, and Affirm. Instead of instant digital transactions, B2B payments suffer from manual, lengthy and painful processes.
Growing demand for BNPL solutions in EU
Given the demand for such innovations then, it’s unsurprising that global leader for insights on innovation in payments and platforms PYMNTS has recently highlighted the latest B2B BNPL movement in the EU.
In their latest article about flexible B2B payments and its positive effects on EU BNPL growth, PYMNTS reference several EU BNPL players - detailing the growing traction of BNPL for business, “prompting B2B lenders to use BNPL solutions to meet a variety of business credit needs.” It’s this demand that’s fuelled such explosive growth across Europe and to a larger extent, the rest of the world.
But while the advantages of B2B buy now, pay later are already being seen for small and medium sized businesses, that’s only the tip of the iceberg.
Global B2B enterprises, for example, that span “cross-border supply chains with multiple currencies” need a payment solution that caters to the “more complex and capital-intensive needs of B2B clients”.
And when you consider that markets like the US and Canada still make B2B payment via cheque 33% of the time, it’s clear that the global B2B payments space is still very much in need of rescuing.
Supported further by the fact that 59% of American businesses believe that B2B transactions will benefit the most from faster and real-time payments, it’s easy to understand why this needs to happen.
A global B2B payments solution
To support the demand of B2B enterprises operating across borders, Two has recently partnered with Santander and Allianz Trade. As PYMNTS explains, Allianz Trade will provide credit insurance, Two will power the technology behind the new platform, while Santander’s Corporate and Investment Banking (CIB) unit will fund the loans.
This partnership is particularly timely when you consider the size of markets outside of Europe, like the US. The US B2B eCommerce market, for example, is predicted to hit $1.8 trillion by 2023, highlighting the need for a solution that caters to the needs of global businesses.
Another recent partnership between Two and trustshare aims to solve the same issues but for small and medium sized businesses. As trustshare CEO and Co-Founder Nick Fulton explains, “trustshare and Two’s new partnership is bringing the entire fintech ecosystem to a B2B marketplace’s fingertips across payments, escrow, banking and trade finance."
The developments in buyer-seller relationships include everything from trade finance to credit insurance. And thanks to this partnership, trustshare can now instantly open credit lines in checkout of up to $/€/£ 250,000 for business buyers on B2B marketplaces in 12 countries across North America and Europe – a first for global fintech.
The future of B2B payments for both SMBs and large corporations on both a local and global scale is set to be an exciting one. And while anything but a simple problem to solve, partnerships like this one are expected to solve a whole lot just in time.