B2B Companies Navigate Tricky Cross-Border Marketplaces And Payments  

Say the words “online platform,” and most people in the payments and commerce business will instantly rattle off a few marquee names: Amazon. Airbnb. Alibaba. The online marketplace model that brings multiple buyers and sellers together is nothing new. But it’s been gaining steam as the pandemic has shifted consumers online to get what they need.

And as Christophe Bourbier, CEO and co-founder of eCommerce payment aggregator Limonetik, told Karen Webster in a recent conversation, the online marketplace has become an especially urgent consideration for smaller firms across the globe that have yet to build out their eCommerce presence as robustly as they’d like. Marketplaces are a platform for growth and scale, it’s true — but using them to expand across borders and currencies carries risks and challenges.

Bourbier said marketplaces such as Amazon, Airbnb and eBay are “just the tip of the iceberg.” Moving forward, he said, business-to-consumer (B2C) firms, business-to-business (B2B) enterprises and even franchises will launch their own online markets, as that model “will be the best and most effective way to add new products and services.”

The days of typing in search terms via Google to find who sells what you’re looking for are gone, he maintained — and now, the habit is simply to log onto platforms (Amazon is a go-to choice) to see the lowest prices and fastest delivery windows. It’s a de-facto expectation that what one needs, one can get with a few clicks — and it will carry over onto these burgeoning (and yet to be created) marketplaces.

In general, he contended, the platform is successful “not because Amazon is buying every product there is,” but because it is providing a forum for anyone selling their own products and services to list what’s on offer. And as platforms evolve, they’re able to accommodate commerce across all conduits — eCommerce, online/in-store or even curbside pickup.

Getting Ready For B2B

What’s worked for B2C, said Bourbier, will work for B2B — a vertical that has been stubbornly rooted in paper checks, invoices and FX costs tied to cross-border transactions. Previous industry efforts to bring B2B marketplaces to scale had failed in past decades, as buyers did not materialize or there were concerns over the transparency of the processes. All too often, there were limited payment options on offer.

The benefits of the platform model will be especially apparent within the B2B sector, where merchants can sell complex, highly expensive industrial products, but will also want to “sell” add-ons such as delivery, training and spare parts — reflecting the horizontal, cross-selling opportunities that are embedded in platforms.

Think, then, of the supplier that sells some of the engine components for helicopters or planes. For the manufacture, purchase and assembly of those parts, the critical aspects of the online purchase lie in 1) finding what they need online, 2) making sure it will be delivered on time and 3) paying for it all. For an optimal online experience, said Bourbier, the B2B marketplace must have a user experience (UX) that mirrors the streamlined experience that has become a hallmark of Amazon (and other sites).

Buyers and suppliers need help as they navigate the challenges of cross-border markets and the payments that move from buyer to supplier. In consumer-facing commerce, we pay the way we want to pay, and sellers get paid the way they want to get paid — and B2B is due for a similar evolution.

Bourbier noted that Limonetik’s platform-as-a-service supports more than 285 payment methods in 60 countries — processing, aggregating and creating payment methods across B2C and B2B channels. The company aggregates multiple financial flows into one settlement and supports these services with comprehensive reconciliation and reporting tools via API.

“In a way, this is a form of quality control,” said Bourbier. “Things were digital before COVID, but we’ve had a lot of B2B companies coming to Limonetik because they have realized that digital was not a ‘nice to have,’ but became a ‘must-have.’” As he told Webster, B2B has been marked by complexity, where escrow may be part of the process and funds may not be released until (to use the previous example) the helicopter parts are received and inspected.

The complexity mounts when a buyer with a long supply chain may need to purchase several items — with one transaction — across vendors located in different countries.

“In terms of marketplaces, it’s not about managing one account for a merchant. It’s about managing a lot of sub-accounts,” said Bourbier. Against that backdrop, he said, a gateway PSP might hypothetically come to Limonetik because they might not be in the “flow of funds,” or might not know “how to serve some merchants’ sub-account needs or conduct KYC for banks.” Some use cases: A provider may not know how to collect Alipay or WeChat transactions. Other times, merchants may want to enter new markets while maintaining their relationships with particular gateway providers. Embracing the platform as a service model, said Bourbier, means that Limonetik can keep the aggregation of all those activities behind one API.

Limonetik can make payouts to vendors in dozens of countries across Europe, and Bourbier noted that in a business model that is different than other providers such as Stripe or Adyen, “we can interchange any component of what we do with existing components.” He explained that Limonetik’s gateways can be interchangeable with First Data’s or Ingenico’s gateways. Acquirers can be mixed and matched, too, according to the market.

“It’s a white-label solution,” he said of the company’s offerings, which help industrial giants such as Siemens work with local suppliers, as well as acquirers, banks and payment service providers, among other stakeholders. “Cross-border is a sweet spot for us,” noted Bourbier, adding that “we do the collecting and the marketplace setup. And when we go directly to merchants and marketplaces, we do so mainly for very international, complex needs.” Limonetik, he added, handles the know-your-customer (KYC) aspect of onboarding, ensuring that entities are authorized to receive payments.

The Ongoing Digital Transformation  

Drilling down into the pivot that is still underway for B2B on a global stage, through the past several decades, particularly among smaller merchants, B2B transactions have been done through tried-and-true channels and networks such as ACH, SWIFT and SEPA.

“As these merchants increasingly go digital, they still want to be paid with ACH, but they also want to leverage the digital payments that have been designed and developed for the last 10 or 15 years. Not all of them are eligible for B2B payment,” said Bourbier. No one is going to pay for helicopter parts using PayPal, after all, he noted.

But in a world where credit card transactions carry what he termed a terrible UX experience and high transaction fees, he said, buyers and suppliers are looking for payment methods that will have lower costs and capped fees, seeking out new ways to do bank transfers in an age of PSD2 and open banking.

Limonetik has been observing increased adoption and demand for recurring payments, and Bourbier noted that “in Europe, (especially in France), we see a lot of credit card payments, but we have a lot of payment by installments as well.” Other countries, such as Portugal, are seeing an uptake in QR code transactions, while in Africa there’s been a leapfrogging from cash to mobile.

Alternative payment methods, he said, are showing “value-add that corresponds to the specificities of various industries” as domestic transactions take place using the buyer/suppliers’ payment method of choice — whether the payer is Airbus or a small to medium-sized business (SMB).

“In  B2B, we’re seeing the exciting mix of electronic payments and digital payments that use old rails in new ways — as we know them in B2C — but also of more old-fashioned payments like ACH and SWIFT,” Bourbier told Webster.