In challenging times, commercial firms need to get creative about the way they do business.
Luckily for business-to-business (B2B) players large and small, creativity often springs from flexibility — and digital innovations like buy now, pay later (BNPL) solutions, real-time payments, and the use of generative artificial intelligence (AI), are not only adding flexibility to traditional business dynamics but are also having a profound impact on the broader commercial landscape.
On Thursday (Nov. 2) Amazon Business began offering BNPL services to its sole proprietor business customers in collaboration with Affirm.
“We’re constantly striving to make Amazon Business the best place for small businesses to fulfill their buying needs,” said Todd Heimes, director of Amazon Business Worldwide.
The move comes after Galileo Financial Technologies partnered with Mastercard last month to offer BNPL to small businesses.
“Businesses have the same expectation that they have consumer-like experiences,” which means the timing is right to bring BNPL more firmly into the small business sphere, David Feuer, CPO of Galileo, told PYMNTS in an interview about the launch.
That’s because B2B buyers — and sellers — are becoming more “human,” as the consumerization of the payment experience trickles down to commercial transactions, in part due to advances in technology and in part due to a behavioral shift as younger generations rise into key decision-making roles.
The result is that today’s B2B dynamics are increasingly being reshaped by evolving expectations around convenience, cost and flexibility as firms increasingly shop around and tap digital marketplaces to find the best fit for their needs.
See also: The Trickledown Consumerization of B2B Payments Helps Firms Win Business
The adoption of BNPL and generative AI is reshaping traditional dynamics between buyers and suppliers.
With BNPL, buyers gain more control over their cash flow, allowing them to negotiate better terms with suppliers. This change in power dynamics can lead to more equitable and mutually beneficial agreements.
Suppliers, on the other hand, benefit from quicker payments and a broader customer base. BNPL for business means that suppliers can offer their products and services to a more extensive range of clients who may have previously been unable to make immediate payments. This expanded customer base can lead to increased sales and revenue for suppliers.
Generative AI is also playing a role. The automation of administrative tasks like autofill and reconciliation reduces the potential for human error, leading to smoother and more trustworthy transactions.
“B2B has needed to put up with bad software for a long time, or one-size-fits-all software, that wasn’t really built for them,” Constructor CEO and Co-Founder Eli Finkelshteyn told PYMNTS in July. “It just makes a whole lot more sense to have AI solve that problem for you and do 90%, 95% of the work.”
Read also: 75% of AP Teams Reported Processing More Invoices Last Quarter
“We just live in a world today that moves a lot faster than the legacy systems can support,” Drew Edwards, founder and CEO of Ingo Money, told PYMNTS.
And business large and small and increasingly coming around to that reality and recognizing the need to modernize their systems, at least in part.
“In general, business customers are no longer accepting of the clunky manual processes long associated with B2B accounts receivables,” Shawn Cunningham, managing vice president and head of Capital One Trade Credit at Capital One, told PYMNTS.
Echoing that sentiment, Cunningham’s colleague, Ben Lamm, COO at Capital One’s Trade Credit Business, told PYMNTS in a separate discussion, “If you’ve equipped [an organization] with the tools to make customized purchasing offers in real time and reduced the friction for the buyer by giving them self-service capabilities backed by great customer service … all of a sudden, that little old AR program that was running in the background that hadn’t changed in years just became a really powerful growth lever.”
PYMNTS Intelligence from the report “Automation Clears the Path to Getting Paid on Time,” a collaboration with Billtrust, found that 68% of CFOs cited payment delays as a lingering problem for their firms.
As for the paper chase and the points of vulnerability, 45% of the CFOs surveyed mentioned invoicing errors and discrepancies also caused payment disruptions.
The AP processes also have room for improvement, PYMNTS Intelligence shows. Seventy-six percent of CFOs said processing vendor payments is rife with friction, and exceptions have proven to be especially onerous. Nearly half of the finance teams surveyed said they spend hours responding to vendor inquiries on those exceptions.
That’s why, as the world of commerce continues to evolve, businesses that embrace innovative digital tools will be better positioned to thrive in the fast-paced, competitive environment. The marriage of technology and commerce is creating a more efficient, transparent, and dynamic ecosystem that benefits both buyers and suppliers, ultimately leading to a stronger and more resilient global marketplace.
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