$1.8 trillion of B2B e-commerce volumes in Europe are growing 10% a year as business spending increasingly shifts online into web stores and marketplaces.

This surge in B2B online spending has created fertile ground for the emergence of B2B Buy Now, Pay Later (BNPL) platform that address the complex payments and credit needs of businesses in online checkouts. For businesses, working capital is so often an integral part of the payment decision process - in the offline world, paying on terms is the norm rather than the exception.

B2B BNPL platforms offer a host of advantages for both buyers and sellers versus alternative payment and working capital financing solutions such as corporate credit cards, bank loans, invoice discounting or factoring. These include:

• Instant credit decisions, boosting sales and reducing payment friction: B2B BNPL providers provide transaction-specific, instant credit approvals directly in the checkout flow. With flexible credit terms, they can increase average basket sizes, reduce cart abandonment, and encourage repeat purchases.
• Lower costs for buyers and sellers: typically lower cost for sellers than comparable corporate cards, often with higher approval limits for buyers.
• Streamlining operations for sellers: simplifying receivables processing and payment reconciliation. By offloading collections and payment risk to the BNPL provider, sellers can focus on growing their business rather than chasing unpaid invoices.
• Improving cash flow cycles: buyers get the flexibility they need to manage cash flows, while sellers enjoy faster and more predictable payments, creating room for both parties to scale their operations.

For any B2B BNPL to succeed, they must at the very least be able to offer a variety of flexible payment terms (such as 30, 60, or 90-day extensions and instalments), sufficient credit limits to support a breadth of trade finance use cases, and – of course – robust risk management. Advanced fraud detection and credit risk systems are essential to enabling real-time credit-decisioning, maintaining high acceptance rates, and minimizing margin erosion from fraud and defaults.

However, the leaders that will emerge in the B2B BNPL category will stand out by:

• Winning the distribution landgrab: success hinges on wide availability through payment service providers and shop systems, lowering the barrier to adoption for merchants and marketplaces without requiring a direct integration. Omnichannel availability, including in-store solutions, will also be a significant bonus. The network of known buyers and sellers over time becomes a powerful tool to improve risk decisions, margin improvements and unit economics.
• Becoming the trusted brand for B2B buyers: we believe there is huge in becoming a strong branded offering for buyers, opening up cross-sell opportunities selling - just as Klarna’s has succeeded in the consumer space.
• Cross-border capabilities: platforms that are enabled cross-border can cater to international buyers and enterprise merchants, delivering a more valuable product offering as well as unlocking FX revenue streams
• Exceptional post-purchase support: that enhance the buyer experience and seller product offering

At Dawn, we are proud to have invested in Billie, a leading B2B BNPL platform available across the UK, Western and Northern Europe, and available across top PSPs including Adyen, Stripe, Mollie, and Klarna delivering better payment experiences for B2B buyers and sellers.