Nicolas Pinto on LinkedIn: #innovation #fintech #banking #openbanking #embeddedfinance #apis… (2024)

Buy Now, Pay Later (BNPL) models have gained significant popularity in the consumer space, allowing individuals to make purchases and pay for them in instalments. However, the concept is also evolving and expanding into the realm of business-to-business (B2B) transactions, especially in the context of B2B factoring.Here's how BNPL for businesses, specifically in B2B factoring, can be beneficial:Improved Cash Flow: BNPL provides immediate funds to suppliers, easing cash flow constraints, particularly for smaller businesses.Risk Mitigation: BNPL platforms reduce the risk of non-payment, as intermediaries ensure prompt payments to suppliers, allowing them to focus on core operations.Working Capital Management: Suppliers can enhance working capital by receiving early payments, enabling better investment, timely payments to their suppliers, and effective expense management.Streamlined Processes: BNPL platforms streamline invoice management, payment processing, and reconciliation, saving time and resources for both buyers and suppliers.Competitive Advantage: Buyers adopting BNPL gain a competitive edge by fostering stronger relationships with suppliers through timely payments and improved working capital.Data Insights: BNPL platforms leverage data analytics for transaction trends, supplier performance, and financial health insights, aiding informed decision-making for both parties.Tech Integration: BNPL's technical infrastructure seamlessly integrates with existing business systems, simplifying adoption for suppliers and buyers.Flexibility in Payment Terms: BNPL for B2B transactions offers flexible payment terms, accommodating the financial needs of both parties and fostering sustainable and mutually beneficial relationships.Regulatory Compliance: BNPL platforms handle regulatory compliance, ensuring adherence to financial regulations, particularly crucial in cross-border transactions.While these benefits are evident, businesses should carefully assess BNPL agreements, considering fees, interest rates, and long-term financial implications. The evolving landscape of BNPL in B2B transactions presents opportunities for enhanced financial management and efficiency.

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Buy Now Pay Later (BNPL): The B2B Business Space 👍Primarily BNPL success has been driven by the consumer side, a lot has been talked & written about about BNPL “B2C” success stories. But experts do believe that their is massive BNPL “B2B” opportunity space.Now a days the most critical problems companies faces is realisation of receivable, as extended cash conversion cycle causes Businesses failures / insolvent. Can Bank borrowing alone address this critical issue alone. In emerging economies the SMEs borrowing gap is 5% to 7% of GDP.So, what sales strategy manufacturers / suppliers adopt to sell to ensure timely realisation of trade receivables? Selling goods on trade credit to buyers, which is receive goods now but pay later in 30, 60, 90 days, and invoice factoring (invoice financing) is one of the most popular ways that suppliers employ to improve liquidity:Under IF / IF arrangemnts seller sell their invoices to a third-party “factoring company” at a discount and in exchange receive 80-90% of their invoice value - money. Under the arrangement Buyers pay directly to factoring company. In the end manufacturer / suppliers get the remaining amount of the invoices minus the factoring company fee.Considering above - B2B BNPL can be a credible alternative. How ?- Set-up “as the B2C model”- manufacturer / provider integrates with the supplier and offers B2B BNPL as a payment option integrated at check-out.- The provider does the risk assessment and provides the buyer installment payment terms.- The seller gets upfront the total selling price.- The provider controls the e2e flow (product, risk, integration, collections, etc) and manages default – it usually charges the supplier a % fee for these services.The opportunity is enormous: estimates converge that payments between businesses are on a global scale a $120 trillion market. A number of fintech providers are trying to build on the momentum at this space.The model is similar to BNPL B2C, but below are some key differentiating factors:- Underwriting companies with much bigger amounts means considerably more risk.- Customer journeys are much more complex in the business world with high KYC requirements, additional steps and an array of software and systems (i.e. accounting, ERP) that come into play.Which is why most of the competing players in the B2B space aren’t the big B2C names, but rather stand-alone fintechs focusing on the specifics of businesses (although synergies exist.B2B BNPL has the potential to revolutionize business payments, but we are not there yet. Take-off depends on a number of factors with the following standing out: - Risk underwriting and fraud prevention capabilities need to improve. - Distribution via B2B software.- Marketplaces.- Focus on industries and verticals as a competitive edge.- Emerging top players will be those addressing SME challenges in holistic ways beyond financing. 👍🤞

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B2B acceptance and payments landscape!I have been part of the B2B business and the opportunities it creates for the rest of the world since 2005. From my formative years with American Express, we focused on positioning Travel & Entertainment products but also worked towards breaking into the world of B2B payments.As the word suggests, "Business to Business" payments is a broad and diversified line of business encompassing the world of trading, remittance, e-commerce, or just payments in general. I am not here to write about potential volumes but to break down the opportunity in a simplistic way, making it more attractive for large, small, and medium enterprises to understand and make decisions that lead to savings in various forms of business transactions.Referring back to my indoctrination into the world of payments, I got my first introduction to a "central purchasing products" used by companies buying products for business operations, from fuel to raw materials, electronic products, IT products, and more, regardless of the transaction's size, which was often repetitive in nature. The benefits of using "central purchasing products" not only provided cash flow benefits but also universally helped in consolidations and reconciliations of these transactions on a singular platform. These products were agnostic of the issuers who issued the plastic or virtual products but fundamentally ran on one key proposition: connecting customers to suppliers and suppliers to their vendors. There are various models that these schemes operate under, but largely in today's world, if proposed effectively, they can lead to substantial savings and monetary gains.I have been fortunate to have worked with various industries propagating this business model. However, there is still scope for expansion within the e-commerce and travel tech verticals, which are still highly cash-driven businesses.How can we be more effective within the e-commerce & travel tech verticals?Virtual buying and selling are becoming integral parts of society, and I believe Covid-19 has accelerated operations where everything is available at the click of a button. While most companies have well-defined front-end checkout pages for customers, there is room to consolidate all supplier payments and transition from cash to card payments at some point in time. The question of the "operational feasibility" of this idea eludes most e-commerce companies, and although there is a plethora of knowledge available, we still need someone to manually execute the plan where real-time payment systems are becoming more prevalent, allowing businesses to transfer funds instantly. This trend is driven by the need for faster transactions and improved cash flow management.I am cognizant that I have touched upon just two verticals for today's story.I would be happy to speak with you in greater detail if you are trying to understand various offerings for your # B2B payment # B2B acceptance

B2B acceptance & payments is a broad subject to write about & the ongoing digital transformation continues to shape the world of B2B payments. More businesses are adopting electronic payment methods and digital invoicing to streamline processes and reduce manual work.The question of connecting the dots in a fragmented business offers substantial opportunities and challenges for payment companies to create solutions that connect on a single platform, B2B2B2C. Of course, there is an ancillary revenue stream of collecting and disbursing funds that would be linked to "remittance," which we will discuss next week. In the mean time if you have any comments or like to talk about your business then leave a message. #b2bpayments #b2bbusiness #b2bsales

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Buy Now Pay Later: In-house or Outsourced, that's the burning question. Indeed, why pay another company to profit from your customers?🚨 Engaging an external service for Buy Now Pay Later in ill-suited circ*mstances can yield damaging results:Increased dependencies, reduced flexibility, poor conversion rates, higher abandonment rates, potential data loss, high costs or even overdebted customers due to an irresponsible credit policy.😎 FundamentalsTo successfully operate an in-house #BNPL, a comprehensive strategy is pivotal, as is a team of cross-functional e-commerce virtuosos who tirelessly fine-tune the structure:👉 Credit Check & Fraud Prevention👉 In-house processes👉 Dunning & CollectionThese components need to be harmoniously orchestrated and integrated into the broader strategy. Interconnectivity is the secret to success.A dedicated credit management system is a must.💯 KPIs, indeed, are always a subject of great import:The primary challenge is to recognize all relevant KPIs.The secondary challenge is to accurately generate and calculate them.Lastly, proper management based on the strategic plan is crucial.🌎 International scalability within an in-house approach can be attained with foundational guidelines, as attention to the minutiae is key.Of course: The countries where an in-house approach should be taken need to be correctly identified.Especially since there are indeed procedural differences internationally in the processing. But that's another story in itself.🤘 The configuration of the unit is just as crucial.A misguided "expert" can cost millions. That's why strong leadership is vital. And absolute KPI control.Otherwise, it will result in significant financial ramifications, leaving your bottom line in shambles, while the purported expert effortlessly migrates at some point to other lucrative ventures (at least for the „expert“).Or, if sheltered by feeble leadership, some will persist in causing untold disruption, akin to a proverbial bull wreaking havoc in a delikate china shop. Especially international credit management is due to the complexity a breeding ground for such issues. Remember: A talent shortage doesn't excuse every hire.💡 TakeawayIn-house execution should only be undertaken when it's the right fit!There are compelling reasons to rely on external expertise, particularly when the data for credit checks is lacking, your firm is of a smaller scale, or there's a need for swift expansion.KPIs in this area will often backfire with a time delay.Both approaches - inhouse as external provider - demand a highly trained team boasting impressive market acumen.And leadership that exhibits sound judgment, coupled with the continuous desire to improve the team.🪄 The magical formula is: Do it smartly!More in the upcoming weeks!#voicesofdouglas #passionforpayment #bnpl #payment #ecommerce #buynowpaylater #payments

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I didn't know B2B payments was so outdated.Having worked in fintech for more than 7 years, I've seen payments in B2C evolve at rapid speed. B2B payments, however, is lagging behind. More than 40% of B2B payments still happen with paper checks according to a PYMNTS report. As a matter effect, more than 80% of B2B companies still use paper checks in the US.I get why we've received such a surge in inbound leads from Neobanks, Fintech and B2B SaaS companies lately.Here are 3 challenges I've noticed:1. The buying cycle is super complex.- First a purchase order.- The supplier then fulfils the order.- The supplier's finance team creates an invoice.- The customer's supplier team processes and pays the invoice.- The buyer receives their goods instantly, but payment terms are between 30-90 days.2. Payment terms are actually a thing.- The one buying isn't necessarily always the payer. It's the finance team.- Major payment methods aren't always instant.- There are approval steps to go through.- Reconciliation is a pain.- Payment takes time.3. Cross border payments are complex.- Complexity is expensive.- Currency exchange fees add up.- Different countries mean different systems and teams involved.- Especially where there many processes involved, manual processing causes even more mistakes.If these are all issues with buying side of things (Procure-to-Pay), you can imagine the pain is felt on the selling side of things (Order-to-Cash) too.And where there is pain, there is money to gain.Which of these 3 challenges do you think your B2B customers deal with the most?

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As the demand for convenient #payment processes continues to grow, #embeddedfinance is set to become an integral part of the B2B landscape.

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“We’re in a bit of a land grab in the B2B environment,” - Jeff Sloan, CEO, Global Payments. "(Incoming Global Payments CEO, Cameron Bready) agreed that the company has collected the right assets to offer comprehensive B2B services, but M&A remains a lever the company can pull to accelerate its presence in the space."This is a great example of one of the underlying trends happening in the fintech sector. There have been multiple fintech entrants in the last 3-5 years and an impressive amount of them have been focused on B2B (or related B2B2C) opportunities. This has resulted in an exciting yet fragmented provider landscape. Global Payments is the type of strategic buyer that will be digging through the market to uncover unique opportunities. What unique B2B fintech offerings can be leveraged against a massive merchant and corporate customer base, which Global Payments certainly has, to drive incremental revenue and promote new solutions to the market? Similarly, how can these same types of unique B2B offerings be licensed to legacy TSYS bank customers to drive incremental scale, similar to the methodology behind the Mineral Tree acquisition?Lots has been written about the PE and VC markets cooling down in the coming months. That might be true. But as Mr. Sloan and Mr. Bready suggest, B2B fintech transactions is likely to be an exception to that rule.

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Great B2B payments article from Matt Brown. I am also a firm believer on vertical ERPs/payment softwares. Most of the business inefficiencies are actually on the process workflow and data management. Whoever tackles only the payment/corporate card piece isn't addressing the real pain point. There is a much larger opportunity up for grabs.

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Discover the ins and outs of #B2B #payments. Versapay's comprehensive guide uncovers the advantages of adopting digital payment solutions:https://bit.ly/45R2aaF

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