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The future of B2B marketplace payments and B2B Buy Now, Pay Later

Picture404 - Finance Digest │ Financial Literacy │ Financial PlanningBy Luke Trayfoot, Chief Revenue Officer, Mangopay

What existing gaps or challenges within the payments industry does the partnership between Mangopay and Aria aim to overcome?

Our ongoing challenges revolve around limited access to flexible payment solutions, mainly because B2B payment rails haven’t fully optimised operations like their B2C and C2C counterparts.

Fast-growing businesses actively seek rapid financing and deferred payment options but can encounter roadblocks in a market dominated by traditional financing models, which too often come with long approval processes. Moreover, there isn’t a huge range of options for businesses when it comes to Buy Now, Pay Later (BNPL) services.

Aria, our new partner, is addressing these challenges by providing businesses with advanced payment and credit assessment solutions, enhancing conversion, building trust, and improving cash flow. Integrating Mangopay’s flexible payment services alongside Aria’s solutions creates a powerful combination—providing a modular marketplace payment system and extensive credit solutions, giving businesses control over their payment strategies and easy access to trade credit.

What makes B2B BNPL an emerging trend in the payments industry?

I have seen in the market that there’s a massive demand for modern BNPL services among businesses. While BNPL services have traditionally targeted consumers, the trend is now shifting toward B2B to meet the demand for increased convenience and obtain funding.

Access to flexible ‘pay later’ options, whether it’s for loans or buying goods and services in instalments, can require meeting stricter criteria, like credit history, existing business debts, and other factors that elongate the approval processes. However, new players like our partner, Aria, are developing BNPL services specifically for businesses, making it simpler and less time-consuming to access flexible financial options. These services are gaining momentum due to increased demand, improved payment experiences, diverse payment methods, and enhanced buyer loyalty. B2B BNPL is here, and it’s here to stay, offering convenience for those paying in instalments and faster transactions for those receiving payments.

At Mangopay, we’ve proactively recognized these trends and assisted B2B marketplaces in adopting solutions such as BNPL, insurance, and the ability to manage trade credits and automate B2B billing through our integration with our partners.

Looking at the current industry dynamics, what has been pushing the growth around B2B marketplaces?

Sales on B2B marketplaces have been increasing, with SaaS solutions playing a pivotal role in their growth. SaaS solutions, equipped with APIs and pre-built integrations, have allowed B2B marketplaces to cut down on time and costs associated with resource-heavy IT systems.

This shift has enabled marketplaces to focus on attracting more supply and demand, having learned from the success of B2C models to optimize transactions, they also know the power of providing personalized user experiences and managing supply chains efficiently. The benefits for these businesses include higher order values, larger transaction volumes, and more stable cash flows.

It’s also worth noting that it’s not just B2B businesses adopting B2B strategies, B2C players like eBay and Amazon are moving toward B2B, highlighting the perceived growth potential of this sector.

What does the future hold for B2B marketplaces in the era of embedded finance?

In two simple words: seamless integration. The future of B2B marketplaces in the era of embedded finance hinges on the seamless integration of financial services.

As the demand for B2B marketplaces grows, it becomes crucial for these platforms to integrate services seamlessly. This includes faster and more effective onboarding, providing more accessible financing options, and using open banking APIs.

Embedded finance’s growth is driven by several factors, such as the increased expectation for B2B purchases to incorporate embedded finance options, and the estimated growth of B2B ecommerce to USD 1.8 trillion by 2023, to name a few.

When we look at the connection between BNPL providers and B2B marketplaces, it’s clear that embedded finance leads the way in this relationship.

In the future, thanks to the seamless integration of financial services, B2B marketplaces will transform into all-in-one operational ecosystems. Here, businesses not only make transactions but also access a range of financial services, including instant payments, BNPL options, real-time invoicing, and quick credit access.

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