B2B BNPL is an exciting and growing area within the fintech space with the potential to transform how businesses manage their finances and make purchases, particularly for small-to-medium enterprises (SMEs).
As the market matures and more providers enter the space, further innovation and adoption of B2B BNPL solutions is expected, allowing more businesses to defer payments while suppliers get paid upfront, removing the need for traditional bank loans, which often come with high interest rates and lengthy approval times.
Those are the views of Mark Beresford, Director at payments consultancy Edgar, Dunn & Company, writing in The Paypers’ Buy Now, Pay Later Report 2025 – Providers, Trends, and Key Aspects for Merchants and PSPs, which notes B2B BNPL is growing particularly strongly in Europe through providers such as Billie, Mondu, Hokodo and Trevi.
With ecommerce growth and businesses now expecting fast, seamless transactions, shifts are being driven by digital transformation as more B2B purchases are happening online, requiring instant, flexible payment solutions. Moreover, SMEs struggling with cash flow need better financing options.
But even though B2B BNPL solutions can build on similar technologies and business models to B2C, the report also acknowledges the B2B market involves more complex credit assessments, longer payment cycles and higher collection costs. These challenges have to be balanced against larger transaction sizes, stronger customer loyalty and lower default risk as businesses rely more on maintaining solid credit scores.
A new report on the ‘pay later’ ecosystem in the US from PYMNTS Intelligence suggests the popularity of this model is forcing traditional banks to rethink how they integrate instalment options into their more traditional credit lineups and to do so as part of the shopping journey, rather than as a post-purchase experience.
The report authors agree that businesses are increasingly leveraging BNPL options to finance their inventories, operational costs and supplier payments, improving cash flow management.
There has also been a trend for shifting the cost of BNPL from merchants to consumers. As competition arises for merchant integration dollars and attention, BNPL providers often compete for BNPL status by paying merchants to add their payment options to the checkout.
Such payments can range from hundreds of thousands to many millions of dollars and sometimes come with checkout guarantees.
There have been some interesting developments for BNPL providers of late, with Klarna signing up US restaurant delivery service DoorDash last month and becoming the sole provider of buy now, pay later loans for Walmart’s fintech, OnePay, while gaming retailer GameStop has partnered with Zip.
The hospitality sector faces a number of unique operational challenges, prompting hospitality technology provider, Sabre Hospitality, to introduce BNPL late last year.
“There are several BNPL options available, but it was vital for us to receive timely notifications and clearly identify when payments were made through the BNPL solution to avoid operational disruptions,” notes Jon Lazarus, Director of Distribution.
The company has seen a 15% increase in average order value compared to non-BNPL bookings across all property types and believes the BNPL option is encouraging travellers to book higher-tier rooms than they might have otherwise chosen.
“We’ve seen a notable increase in revenue from Flex Pay bookings – revenue that might not have materialised without BNPL,” adds Lazarus.
