B2C Payment Innovations Are Shaping the Future of B2B Purchasing

As consumers, our purchasing experiences have shifted dramatically over the past five years. For decades, cash and cards served as the main two options for paying for and financing purchases. Recently, embedded payment and financing tools have exploded, bringing countless new ways to complete a transaction and higher levels of convenience along with it:

• Flexible financing is now embedded into almost every kind of purchase (both online and off) with payment plans from Paypal, Klarna, or Affirm available on everything from clothing and furniture to travel and entertainment. 
• We tap to pay with our phones and watches for everything we buy whether it’s a subway ticket, everyday essentials, or at a restaurant.
• Loyalty and cashback programs have become integrated with the buying process like with the Starbucks app and the Costco credit card. 
• The lines between retail brands and finance companies are converging with Apple’s addition of their card and savings accounts. 

In the B2B sphere, the adoption of payment innovation has been slower, but it’s beginning to catch up. B2B buyers are also B2C consumers, so B2C expectations are undoubtedly carrying over to our B2B purchases. 

Simply put, as consumers we expect the purchasing process to become easier and our loyalty to be rewarded with access to deals. In many ways, this has always been true in the seller/consumer dynamic, but the expectations of convenience have increased exponentially. 

B2B brands have the opportunity to stand out in the marketplace and exceed customer expectations by bringing the best of embedded financing into their platforms.

The New B2B Imperative: Meeting the purchasing expectations of B2B customers 

There are four tangible ways B2B companies can begin to meet and exceed the expectations of their customers. Flexible payment terms, modern payment UX, credit programs, and savings and cash back incentives, whether implemented individually or all together, they build a better customer experience. 

Flexible Payment Terms 

Flexible payment options give your customers the option to spread payments over time to better accommodate your customer’s financial planning activities. No matter the type of technology they purchase or their specific financial goals, buyers can always benefit from flexible payment terms. Two examples: 

• Your customer suddenly wishes to invest in your new technology that has a high upfront cost  (i.e. data lake, AI GPUs), yet they may not have the funds on hand necessary to purchase it.. Flexible payment options can support your customer’s ability to acquire your mission-critical technology by allowing them to leverage a monthly or quarterly payback schedule. 
• Even though technology vendors give their customers the ability to pay over time, many more providers are turning toward usage-based billing. This means that at times, for example, Google Cloud, Nvidia, or AWS spend increases beyond the expected amount, and the buyer’s finance team isn’t always prepared to pay it. Flexible financing can help alleviate these unforeseen increases for buyers of technology by offering them individualized terms that keep their monthly bills consistent despite fluctuations in usage.

Modern Payment UX 

Buying technology is hard for your customers. They have many stakeholders and processes. A purchasing process that involves receiving an email with a PDF invoice no longer makes sense. A modern payment platform must streamline the process, simplify the steps, and remove friction. Your customers are used to paying with their watch, so they are expecting an equivalent payment experience. While companies like Ramp and Brex simplified spend management when paying with corporate cards, the vast majority of bills in the B2B space are paid manually. 

B2B purchases are complex and involve many parties and multiple steps: i.e. deal desks, payables, receivables. What if those steps were streamlined into one experience? A one-click buy button and financing platform to simplify and speed up companies getting access to the tech they need. 

Credit Programs

From a consumer perspective, brands create incentives when purchases are financed directly through them. For example with the Apple Card, you get better terms than if you were to go directly to your bank. From a B2B perspective, you can deepen relationships with customers by offering additional credit with the best terms that can be used within your ecosystem. Not only are you offering them flexible payment terms for a specific deal, but you can extend best-term credit for purchases of other products you offer, with your partners, within your marketplace, or anything you resell.

Savings and Cash Incentives 

Consumers are often rewarded with certain discounts and cashback incentives when they spend at a specific brand or within their broader ecosystem. For example, private-label credit cards like travel and store-branded cards incentivize spending at their business by offering extra cashback on those purchases. For B2B, incentivize your user base to purchase within your ecosystem. It could involve offering them cashback or specific discounts on purchases made with your company or with your partners. Find ways to encourage brand loyalty and ongoing spending that increase company revenue and customer lifetime value. 

How B2B Companies Benefit from Adopting Financing Technologies

Leveraging embedded financing tools not only helps you meet customer expectations, you also build a foundation for faster, more sustained growth for your company. The key benefits of adopting financing technology for B2B purchases include: 

Higher Conversion

Better deal terms increase conversions. Financing technologies support you in offering the right terms for each individual customer in a way that you wouldn’t be able to with your current offering. Oftentimes, the deal term discussions slow down or derail the sales cycle, and flexible payment terms give more negotiating power and additional options to close deals faster. 

Shorter Days Sales Outstanding 

By leveraging embedded financing, you can receive payment for an invoice almost instantly. Your days sales outstanding get shortened to basically zero, and your company recognizes the revenue the moment the deal closes, helping with cash flow and runway. Depending on the tool you use, this can happen in a couple of different ways. With factoring, your embedded financing provider buys your receivables and then you pay them back over time, meaning you take on the debt. Instead, with tools like Gynger, the financing terms are an agreement directly with your customer, so your company isn't taking on the debt. 

Seamless Collection and Risk Management

Common challenges like determining creditworthiness or dealing with late payments no longer become a concern with embedded financing. In addition to being paid upfront for the invoice, financing tools support other functions. Prequalification, debt recovery, collection, and other services were once handled in a fragmented way, but now they can be sorted with one encompassing platform. Work with a provider who takes on the risk so you don’t have to.

Increased Loyalty 

With better financial terms and offerings, easier payment, incentives within your ecosystem, and more financial flexibility overall, you’ll have happier, more loyal customers. These better services increase your competitiveness in the market. Especially as some industries become more commoditized, competing at the feature level becomes more difficult. Finance incentives help you differentiate, acquire new customers, and retain them for longer. 

Strategic Implementation: How B2B Companies Can Leverage Payment Trends and Embedded Finance with Partners 

Financial products and offerings aren’t core competencies of your business, so you don’t have to build them yourself. Instead, partner with embedded financing solutions to bring flexible terms, better payment processes, and credit programs directly into your sales flow. 

Just as you want the purchase process to be simple for your customers, so should the implementation of the technology. Elements like seamless setup, smooth CRM integrations, automatic prequalification, and white-labeled experiences for your customer are non-negotiables when evaluating embedded financing software providers. Think through your deal phases and discover the features that will support your specific needs at each phase. 

The Next Payments Revolution is Here 

Payments are one of the fastest evolving and most disrupted parts of not just fintech but technology in general. One of the biggest trends in payments is the shift towards embedded financing which is projected to reach $385 billion by 2029, growing at an annual rate of 30%. Experience the difference firsthand for yourself. See what you enjoy as a consumer and explore how you can bring that simplicity, convenience, and improved experience to your company.