Monthly installment payment solution provider Splitit is rolling out a B2B payments service offering, the company said Monday (Sept. 23) in a press release.
Dubbed Splitit Business Payments, the B2B payments platform connects B2B suppliers to a way to offer their own corporate buyers a monthly installment repayment plan that uses those customers’ existing commercial credit cards.
Targeted toward small and medium-sized buyers and sellers, the platform allows buyers to procure goods with their business credit cards. After payment terms are agreed, a buyer can choose the Splitit Business Payments option. The seller then puts a hold for the total value of the invoice on that buyer’s business credit card.
The vendor can either process an initial payment or wait until the order is shipped. Once processed, the monthly repayment plan begins, allowing the buyer to pay in installments. With every payment made, Splitit lowers the amount of the hold on their business credit card by the installment payment amount.
According to Splitit, because the platform uses existing card networks, the tool can be used for cross-border transactions and offers an alternative to businesses making a deposit — which can often be as much as one-third of the total value of the invoice — or seeking invoice factoring to cover the cost of a purchase. Unlike repaying commercial card balances in installments, the platform does not charge interest and can accelerate the reordering process.
“The $120 trillion B2B payments market has suffered from a lack of innovation for decades,” said Splitit CEO and Co-Founder Gil Don in a statement. “With Splitit’s patent portfolio for credit card-based transaction financing, we can finally get beyond antiquated invoices, purchase orders, credit verification, factoring, payment/collection systems and overstaffed accounts receivable departments.”
In addition to supporting cash flow of the buyer, Splitit also pointed to the scenario of a vendor being asked to hold or split up a shipment at the last minute in order to allow the buyer to cover the cost of only a portion of an order at a time. This strategy, the company noted, can add extra work and expenses for the vendor.
