Boost E-Commerce with BNPL & Trade Credit Insurance

Buy Now, Pay Later: it’s a consumer financing model that has become indispensable to the success of B2C websites. By offering consumers the prospect of delaying their payments – at no extra cost to them – retailers can dramatically boost e-commerce conversion rates and keep customers coming back for more (as long as customers pass an instant credit check, of course).

It’s a phenomenon that’s now gaining momentum in the world of business-to-business e-commerce, where e-merchants still typically require customers to pay in full with a card at checkout rather than via the kinds of deferred payment methods – such as net 30 or 60 days – that are the hallmarks of offline B2B trade.

So what kind of capabilities and business advantages give B2B e-merchants the confidence to grasp the BNPL opportunity? Here are four compelling features that are driving BNPL adoption:

1. Boosting E-commerce Conversions: The Role of BNPL and Trade Credit Insurance

There’s plenty of evidence to suggest that an absence of purchase financing for B2B e-commerce customers makes buyers think twice about the timing and affordability of their purchases, especially when contemplating large or complex business transactions. Different estimates suggest that as many as 50% of B2B buyers have abandoned orders at checkout having found out that the only option was to pay by card.¹

By implementing B2B BNPL capabilities, backed by E-Commerce Credit Insurance, as many as 90% of your customers are likely to be offered payment terms. And early adopters of Allianz Trade’s solutions for BNPL report e-commerce conversion rates of up to 40%.² The result: maximized revenue opportunities and a boost to your business.

2. Fuller checkout baskets and more repeat customers

By offering your B2B customers the option to defer payments, you help to enhance their cash flow and smooth their decision-making processes, often allowing them to commit to more purchases.

BNPL platform companies such as Two observe that sellers who provide flexible payment options experience an increase in customer orders of 60-75% on average.³BNPL also results in more repeat customers: two-thirds of buyers typically come back to websites offering BNPL to spend again within a year.

Implementing BNPL capabilities opens doors to a broader spectrum of trade finance solutions. In the world of B2B e-commerce, trade credit insurance complements other financial instruments like export credit or receivables financing. This holistic approach not only boosts your BNPL strategy but also attracts businesses seeking comprehensive trade finance solutions. By integrating these solutions, your business can offer a more flexible and robust payment ecosystem. This not only enhances customer experience but also positions your platform as a versatile hub for various trade financing needs, thus attracting a wider range of business clients.

Watch how E-Commerce Credit Insurance can unleash your online growth potential

3. Streamlining E-commerce Credit Decisions with BNPL and Trade Credit Insurance

To date, most e-merchants have shied away from providing purchase financing simply because it seems too risky. Their caution is understandable: in many cases, their online channels draw in a much wider set of customers, many of whom they’ve never dealt with before. That’s in sharp contrast to the wholesalers who they have built trusted trading relationships with in more traditional, offline business settings.

As a result, when considering the option of offering payment-on-invoice or other terms, they have had to weigh the higher risk of non-payment – and the administrative overheads that accompany those – against the benefits of offering BNPL.

The good news is that the challenge is now being addressed by the market leader in trade credit insurance, Allianz Trade. By combining real-time checks on the creditworthiness of B2B customers with robust E-Commerce Credit Insurance API, e-merchants can offer BNPL with confidence.

While embracing BNPL solutions can significantly enhance sales and customer loyalty, it's crucial to consider bad debt protection. Imagine this protection as a shield or safety net, guarding your business against the fall of unpaid invoices and bad debts. In the dynamic landscape of e-commerce, where customer interactions are quick and numerous, the risk of non-payment is a serious concern. Trade credit insurance steps in here, offering this very shield. It ensures that even if a customer fails to meet payment obligations, your business's cash flow remains secure. This protection is not just about preventing losses; it's about instilling confidence in your B2B e-commerce strategy, enabling you to offer flexible payment terms without fear.

Here’s how that looks in practice. As a customer adds items to their basket on your website, their financial health is analyzed in real time by connecting to our global databases of business creditworthiness, which contain financial, strategic and commercial information on more than 80 million companies worldwide. The speed of that analysis provides automated trade credit decisions so you can instantly offer the most appropriate credit terms to your customer – with confidence. Should you need to receive instant payment to ease your cash flow, Allianz Trade is partnering with BNPL providers that can provide the financing as well.

The good news is that the challenge is now being addressed by the market leader in trade credit insurance, Allianz Trade. By combining real-time checks on the creditworthiness of B2B customers with robust E-Commerce Credit Insurance API, e-merchants can offer BNPL with confidence.

Here’s how that looks in practice. As a customer adds items to their basket on your website, their financial health is analyzed in real time by connecting to our global databases of business creditworthiness, which contain financial, strategic and commercial information on more than 80 million companies worldwide. The speed of that analysis provides automated trade credit decisions so you can instantly offer the most appropriate credit terms to your customer – with confidence. Should you need to receive instant payment to ease your cash flow, Allianz Trade is partnering with BNPL providers that can provide the financing as well.

Do you want to focus on your B2B sales strategy with total confidence? Watch how

4. Securing E-commerce Payments: The Assurance of BNPL and Trade Credit Insurance

When implemented with the right partners, B2B BNPL can enable e-merchants to offer payment terms online without worrying about whether they will receive payment – or when.

To meet the needs of businesses, Allianz Trade’s solution can help e-merchants leverage BNPL in several ways, depending on the size of the business and whether it wants to receive payment right away:

A multinational company can seamlessly integrate a BNPL capability into its online checkout process that automatically assesses the creditworthiness of a customer in real time before offering them payment terms. When the transaction is complete, an Allianz Trade financial services partner automatically pays the e-merchant the total transaction value, with Allianz Trade covering any potential non-payment – no matter the international location of the customer. Allianz Trade recently partnered with Two, a pioneer in B2B BNPL platforms, and Santander Corporate & Investment Banking to launch the first global B2B BNPL solution for large multinational corporates.
For small and mid-sized businesses, the processing and automatic payment can be handled directly by an Allianz Trade’s BNPL platform provider, such as Two or PausePay, with the business receiving upfront payment and Allianz Trade handling creditworthiness checks and covering the credit period for the platform provider.
Alternatively, you can simply set up a direct integration between your website and the Allianz Trade BNPL service and start providing customers’ credit terms, such as net 30 days, with the credit period – and your guarantee of payment – protected by Allianz Trade insurance.

The final piece of the BNPL puzzle is effective commercial credit risk management. For e-merchants venturing into BNPL, it's not just about offering deferred payment options but also about smartly managing the associated credit risks. Utilizing advanced credit analysis tools and tapping into market risk intelligence becomes essential. This approach helps in identifying potential credit risks early and allows for strategic portfolio diversification. When you manage these risks proactively, your BNPL strategy becomes more than a payment option – it transforms into a comprehensive risk management partnership. This positions your business as a proactive, risk-aware entity, highly appealing to other businesses that prioritize sound financial management.

In all cases, with our E-Commerce Credit Insurance you can rest assured that you will always be paid in full. That means your cash flow is safer and more predictable, and you can plan for tomorrow with greater confidence – and the prospect of BNPL-boosted revenues.