The Benefits of B2B BNPL Payments [+ How to Offer Them]

Miguel Fernandez
Miguel Fernandez
Co-founder & CEO
Posted on
April 23, 2024
min read
The Benefits of B2B BNPL Payments [+ How to Offer Them]

Cash flow optimization is a top priority for businesses both big and small. This is even more true during times of economic uncertainty. 

Business-to business (B2B) companies are required to find new and creative solutions to stay competitive. B2B Buy Now, Pay Later (BNPL) purchasing platforms are one solution that benefits both the seller and the customer.

In this guide, we discuss what B2B BNPL is and why it’s a great strategy. Then, we cover how to offer monthly payments for annual contracts using Capchase Pay.

What is BNPL for B2B?

BNPL is a payment method where customers pay for services or products over a set period of time instead of a single upfront payment. This payment method has gained a solid foothold in the business-to-consumer (B2C) ecommerce space by reducing cart abandonment and increasing sales and revenue generation. 

BNPL can provide a similar positive impact for B2B companies–especially for SaaS and agency services. A B2B BNPL provider integrates into your sales process as a third-party payment processor and financier. When a deal closes, the client gets the product in full and you get paid the full contract amount. The provider then collects the payments from the client over the agreed-upon number of installments. 

5 reasons BNPL is a good strategy for B2B

Let’s dive into why this is such a great strategy.

1. Increase runway

BNPL lowers the immediate out-of-pocket expenses for your clients. This allows you to expand the pool of potential buyers, resulting in more sales. With a BNPL provider, you obtain the full contract value at the close of the deal regardless of the payment terms for your client. More sales with full upfront payments means a longer runway for you.

2. Obtain higher ACV and LTV

Steep upfront costs generate long sales cycles for your sales team and often require discounts to accelerate closing. The consequences of this are a lower Annual Contract Value (ACV), increased customer acquisition costs, and negative impacts on cash flow and growth rates.

BNPL payments distribute the expense of the software so the purchase fits under monthly or quarterly budgets. This speeds up sales and removes the need to offer discounts.

For existing customers, lower upfront costs tend to encourage renewals. This is especially true for those with fluctuating revenue or unfavorable financial positions at the time of renewal. More renewals equate to higher Lifetime Value (LTV).

3. Easier billing and collections

Creating invoices, sending reminders, and tracking down delinquencies is a time sink. This is not where your time is best spent. Capchase handles the billing and collections for products purchased through their B2B BNPL program Capchase Pay, so your company doesn’t have to worry about managing those essential tasks.

4. Transform MRR to ARR

If you’re providing monthly subscriptions or offering BNPL in-house, then the generated revenue is as Monthly Recurring Revenue (MRR) instead of Annual Recurring Revenue (ARR). The distinction between these two revenue sources can have a big impact on your funding opportunities. You can transform your MRR to ARR through B2B BNPL and be able to take advantage of funding opportunities like Capchase Grow.

5. Faster close rates

Sales cycle durations are one of the largest quantifiable metrics for how well your sales team is doing. For B2B SaaS as a whole, those numbers are not so good–about 3 months on average. These quarterly sales cycles can be a big problem if you have limited runway.

Utilizing Capchase Pay has been shown to shorten SaaS sales cycles by up to 50%. The primary reason for this improvement is the smaller upfront cost. Cash flow is critical for your clients (as it is for you) and preserving it while immediately gaining the full benefits of your product is a deal-maker.

The challenges of offering BNPL for B2B SaaS

The primary challenge associated with third-party platforms is selecting one designed for B2B. The most common use of BNPL is for B2C purchases–fashion and apparel being the largest market. B2C purchases typically differ in both size and scope with respect to B2B. As such, the qualification procedures for consumer purchases aren’t designed to handle large-contract B2B deals.

These challenges are removed when you use Capchase Pay. Being one of the top B2B BNPL companies, we charge a reasonable fee (10%) for each transaction and handle the rest of the process for you.

How to offer BNPL with Capchase Pay

Follow these steps to offer BNPL for your B2B products and services.

Step 1. Sign up for Capchase Pay

The first step is to book a call with Capchase where we will work directly with you through the signup process. 

Afterward, you’ll need to integrate our BNPL API into your existing payment system and update your payment gateway to allow BNPL payments.

If you are a Hubspot and Salesforce user, rest assured that Capchase Pay integrates seamlessly.

Step 2. Offer potential clients the BNPL option

After setting up the BNPL platform, it is time to share the news of your new payment method. Make sure your current pipeline contacts are aware of the BNPL options for your annual plans throughout the sales process. 

It is also a good idea to reach out to cold deals that failed to close so buyers are aware of the new payment options. This will demonstrate your continued effort to innovate new ways to meet their needs, and possibly reactivate key deals.

Step 3. Receive full ACV payments at the close of the deal

With the word out on your BNPL solution and new sales streaming in, you’ll receive the full ACV (minus our reasonable fee) when each deal closes. 

All that's left is to leverage the funds as ARR. Then, you can even open new streams of financing to support your growth.

Ready to offer a B2B BNPL solution for your product? Explore Capchase Pay.