According to B2B payments expert Allen Bonde, enabling customers to purchase and pay in the most convenient, effortless way possible, allows B2B players to boost brand loyalty, expand average order values, and drive an increased share of wallet
B2B often trails developments in the consumer world. Because of its greater complexity, innovation takes longer to be adopted. However, a convergence of factors is now driving the rapid uptake of key digital B2C trends, we all enjoy as consumers, within the B2B space. Even more exciting, this adoption promises to unlock the commercial potential of these ideas.
The way organizations pay each other will very soon catch up to where consumer payments already are: increasingly digitized, seamless, and data-driven. In the same way Klarna, Affirm and PayPal have established their brands at the consumer checkout alongside debit and credit cards, a similar trend is emerging in B2B in the form of net terms.
Several clear external drivers of change are at play. There’s growing interest in real-time payments: Europe has been ahead of the U.S. in this regard, but with FedNow rolling out, U.S. adoption is accelerating. At the same time, the global rise of e-invoicing is setting the stage for it to become the default for B2B payments.
Allied to this, there’s rising interest in digital currencies as a payment option in the form of stablecoins, as an example. In the medium rather than the long term, stable cryptocurrencies will be simply another payment method. CFOs will increasingly see their attractive cost structure and the ability to leverage blockchain for smart contracts as compelling advantages. Consider selling something overseas where payment is tied to proof of delivery: with a smart contract, the money could sit in escrow, but as soon as delivery is confirmed digitally, the funds are released automatically.
That’s the kind of seamless, convenience and transparency we all enjoy in our daily lives and companies expect. Until recently, even imagining these possibilities in a B2B context was difficult. But technology is changing the game, and CEOs are eager to harness it. Let’s see how.
How two different corporations are doing this
Two customer transformations we’ve been particularly excited to see have been with two very different, enterprise-scale organizations, Walmart and Lenovo.
We recently partnered with Walmart, the world’s largest retailer, to help its business division roll out the Walmart Business Pay By Invoice program.
This initiative enables qualified business customers to make online orders, in-store purchases, and mobile purchases on net terms via the Walmart Business app. From a consumer perspective, it may not seem like a huge leap, but for the thousands of small, midsize, and large businesses that rely on Walmart, this level of flexibility is a game-changer.
Walmart, and an increasing number of other global companies, see a promising path in creating a B2C-style, highly convenient, data-powered B2B payments service. When the world’s largest retailer uses data to make B2B payments this easy and consumer-like, it’s worth paying attention.
In Lenovo’s case, the global electronics manufacturer is focused on making things easier for its retail business customers. By using a B2B payments platform, Lenovo has introduced a flexible, convenient payment option for business buyers. As with Walmart, the platform includes the ability to pay by purchase order with the net terms options that business users want: a streamlined, consumer-like purchasing experience offering 30-day terms across the LenovoPRO B2B online store in 14 countries, with the payment experience fully localized for buyers in each market.
Companies offering flexible payment options that integrate directly into the buying experience and maintain efficiency and control for the buyer, are the ones that will win in B2B. And that win goes beyond making life easier for one side of the transaction, when done right, it directly benefits the bottom line of the B2B company itself.
Everyone wants convenience
A strong claim? Consider this: Lenovo introduced flexible net term options which led to a 114% increase in average order volume (AOV). There’s also data showing pay by invoice has become a proven growth and CX magnifier for retailers, with buyers welcoming the chance to get more payment choice and more control over payments. A survey with Murphy Research showed 80% of respondents preferred the option to pay by invoice, ahead of the ability to get custom invoicing (74%) and automatic integration into their ERP systems (69%).
When retailers offer these services as a co-branded experience, they open up a powerful new opportunity to deepen trust and reputation through familiarity. Over time, that can translate into capturing a greater share of wallet.
The key takeaway is now is the time to give your business customers a frictionless, convenient experience, from browsing to checkout to payment, is now. Advances in back-office technology have made delivering B2C-level ease and convenience in B2B far simpler than ever before.
Allen Bonde is CMO of global payments platform TreviPay
