How to choose a B2B Buy Now, Pay Later provider

Ethan Cumming
Content Writer

The ability to provide flexible payment options to business customers should be a priority for online B2B marketplaces and e-commerce platforms alike.

Even before the pandemic forced trade to go remote, millennials made up 73% of B2B buyers and were spearheading a growing demand and expectation for B2B transactions to replicate those in the B2C space. This means that buyers are looking for smooth, digital-first experiences and flexible payment options, including the option to buy now, pay later (BNPL) on their purchases.

As Hokodo co-founder and co-CEO Richard Thornton explored in a past article, B2B payments are still decades behind consumer payments. Unlike in B2C, B2B merchants don’t have any good options to offer payment terms to their business customers online. As a result, they struggle with 20th-century credit management solutions including paper-based applications; manual credit checks; painful invoicing, chasing and cash reconciliation; and the costs of late payments and non-payments – the single biggest cause of business failure among SMEs.

That is, until Hokodo and other providers began to revolutionise B2B trade with innovative Buy Now, Pay Later solutions. But how do you choose a Buy Now, Pay Later provider in B2B? What do you need to consider when offering flexible payment terms to professional customers?

These are questions that many prospective Hokodo users ask us, and as a leading facilitator of modern payment terms in B2B, we are well positioned to help you choose a Buy Now, Pay Later provider that is right for your business.

When evaluating different BNPL providers, there are 9 key criteria that you need to consider.

  1. Offer Rate

Offer rate is the proportion of positive responses granted to payment terms requests on your store. The higher the offer rate, the more of your users get offered payment terms, and the more you will benefit from your Buy Now, Pay Later solution with greater average order value (AOV), increased purchase frequency and an uplift in new business.

  1. Tech Performance

Your site is live 24 hours a day, 7 days a week, and your customers could be shopping at any time. This means you need a partner whose uptime matches yours and who provides quick responses any time of the day or night so your customers don’t abandon their carts and start shopping with the competition.

  1. Ease of Integration

This drives how quickly you can get your store up and running with flexible payment terms. A good Buy Now, Pay Later provider will be able to integrate into your checkout in just a few days, saving time and resources while ensuring you can start getting paid as soon as possible. Additionally, make sure your BNPL provider will continue to support you along the way, for example when you migrate to a new platform or upgrade your checkout.

  1. Solution Flexibility

This concerns the ability for merchants to configure the payment solution to their unique requirements. For example, this might include the need to offer different payment schedules, the option to implement the solution with or without financing, or alternative underwriting rules for different types of customers. A provider offering high configurability will work with you to develop a bespoke solution matching your exact requirements and budget.

  1. Payment methods

Different buyers require different payment methods to settle their accounts. It is important to choose a Buy Now, Pay Later provider whose solution supports the most convenient payment methods for your customers so they don’t switch to another supplier. Key methods to support include bank transfer, direct debit, credit card, Skonto, iDEAL and more.

  1. Price

As a B2B merchant or marketplace, you want to make sure the overall cost of your new BNPL solution aligns with your budget and the value created by offering your customers flexible payment terms. A good provider will work with you to understand your budget and strategic objectives to create a solution that fits.

  1. Collaborative Approach

Collaborating, measuring, testing and sharing insights is key for success when it comes to e-commerce. You need a provider who supports you throughout the life of the partnership and continually refines the solution over time so that your store and its payment options remain competitive.

  1. Risk platform

In order to protect your business you need to be certain that the BNPL provider you partner with offers effective risk protection and is backed by reputable insurers and/or financiers. Having this safety net in place will mean you don’t need to worry about getting paid or chasing debt, leaving you to focus on what’s most important - running your business.

  1. End-to-end capability

The benefits of partnering with a provider who offers an end-to-end BNPL solution cannot be overstated. An end-to-end solution is one which relies as little as possible on third parties. Look for a provider who has built an in-house data and credit scoring platform and proprietary underwriting engine. This will allow them to make faster decisions and offer credit to a larger pool of buyers than if they relied on a larger insurer for lending decisions.

Want to find out more about how to choose the right Buy Now, Pay Later provider for your B2B store or marketplace? We explore all 9 of these criteria in detail in our ebook on how to choose a B2B BNPL provider.

Download our ebook today to help you identify the right partner for your business.