The Emergence of B2B BNPL Solutions: An Interview with Allianz Trade CDO.

Transpose the development of B2C e-commerce to B2B? Thanks to Buy Now Pay Later (BNPL), this is now a reality! Interview with Mickaël De Sa, Chief Digital Officer of Allianz Trade in France.

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How can we explain the emergence of B2B BNPL solutions in recent times?

In B2B e-commerce, we see a real delay in terms of payment terms. We often find payments by professional bank card, or costs advanced by employees of the company concerned, but very limited use of split or deferred payment: sellers do not grant payment deadlines to their buyers, mainly because they have difficulty obtaining information on their financial strength. And even so, if they had access to this data, it would be difficult for them to make a quick credit decision, without affecting their user journey, and therefore their commercial performance. It’s a shame, because these payment practices are a real competitive advantage for an e-commerce platform. To respond to this problem, players in the financial ecosystem have organized themselves to develop deferred payment in B2B, while offering a 100% digital purchasing journey, like the customer experience offered in B2C. , fluid and seamless. This is how B2B BNPL appeared, which allows sellers to offer their buyers payment terms, without exposing their cash flow to the risk of non-payments.

What is the benefit of BNPL for B2B e-commerce platforms?

Payment is the critical point of any online shopping journey. Being able to offer a payment term to a buyer is a differentiating element, which will make it possible to both acquire new customers, but also to retain current customers. It is also an excellent way to increase the average value of the shopping basket, since deferred or split payment allows the buyer to spread out the impact of their purchase on their cash flow. However, offering such a payment method should not be to the detriment of the customer journey: it must be integrated smoothly, simply and instantly so as not to affect the user experience. Likewise, proposing a payment deadline exposes oneself to the risk of non-payment. And it would be counterproductive to boost sales without ensuring you collect the additional turnover. Ultimately, this is the whole challenge of BNPL for e-commerce sites: optimizing the purchasing process to stimulate its activity, while preserving its cash flow from possible non-payment.

What is the role of credit insurance in BNPL models?

It is essential: without credit insurance, sellers are not protected against the risk of non-payment. The rise of e-commerce is a boon for many businesses, as it represents a very dynamic additional sales channel. But if we transpose traditional commerce to online commerce, we must also look at the terms of commercial exchanges between companies, and in particular payment. The question is simple: how to allow an e-commerce site to offer payment terms to its buyers, while ensuring they get paid? Credit insurance has protected businesses against the risk of non-payment for more than 100 years, but it was not adapted to e-commerce. We therefore reinvented it by working on two axes: simplicity of deployment, with a solution that can be very easily integrated onto all e-commerce platforms; and protecting the customer journey, with real-time and instant credit decisions.

Concretely, how does this solution work?

The mechanism is simple: (i) the B2B e-commerce site receives an order from a buyer; (ii) the financial health of this buyer is analyzed in real time by Allianz Trade’s information systems, which contain financial, strategic and commercial information on more than 80 million companies worldwide; (iii) if the buyer’s solvency is proven, the latter is offered deferred, split or staggered payment; (iv) if the buyer accepts, the e-commerce site will be covered by Allianz Trade in the event of a possible payment default by the buyer. Thanks to this mechanism, e-commerce sites can now offer their customers a fast and optimized payment experience, with an additional service with high added value that allows them to differentiate themselves from the competition. Everything happens in a fraction of a second, without the end user even realizing it. A good way to boost your online sales while preserving your cash flow!

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