Globally, the B2B payments market is worth $84 trillion.
With the right digital tools, BNPL can be a long-last solution for customers who want or need merchant services.
Let’s get into why BNPL is popular with B2C and B2B customers and how to use this new solution in your business.
Why is Buy Now, Pay Later so Popular with Customers?
B2B products and services are typically higher-priced, so a split payment method attracts customers needing to divide large payments into smaller installments.
There’s consumer demand for BNPL mainly because consumers can buy more products for less upfront. They find that flexible payments make it easier to afford high-dollar products and services.
Unsurprisingly, this demand has made its way from the online shopping page to the professional services sector.
Sometimes customers run into a costly emergency, such as a broken pipe in their basement, and have to consider if the upfront costs are worth it. Traditional financing, such as bank loans, just doesn’t cut it for many customers to make payments from professional services.
Loan Approval Rates at Banks Increased Slightly in January 2021, but Are Down More Than 50% from January 2020.
So customers struggle to start with a loan to pay off hefty invoices, even with this industry increase in approvals. And going through the borrowing process typically takes a hit on credit scores regardless of approval.
Also consider consumers’ hesitation to make face-to-face interactions with businesses right now, including at lending banks.
COVID has affected payment processing with fewer in-person interactions, both in-store and in-office. Customer relationships are also much different from pre-COVID times with more reliance on digital communications and finance solutions.
In response, customers demand (and now prefer) digital, remote solutions for communication and payment processing.
Digital and mobile BNPL solutions like Klarna, Affirm, and Afterpay help capture those customers needing more accessible payment solutions. Customers like BNPL because they can avoid interest if they make payments on time.
B2B businesses need to capture the in-demand payment model of BNPL to better their financial success in an ever-evolving environment.
BNPL can work for your business with the right digital payment solution that makes it easy for your customers to use. And implementing this kind of tool to your business may be easier than you think.
How Does Buy Now, Pay Later Work for My Business?
When businesses require payments from customers in a large sum upfront, it can deter them from making that purchase from the beginning. BNPL helps businesses provide financing to customers to help close a deal as an alternative to traditional methods, like bank lending.
Customers want to be able to get services done with flexible payment plans.
However, they won’t get into your BNPL solution if they don’t know what process they need to undergo — including applications, credit checks, forms, etc.