Embedded Finance Helps Business Buyers Move Commerce Online

Better product data, better browsing, transparent pricing — and the ability to click through the whole process — these are the hallmarks of consumer-facing online commerce.

And, increasingly, the same streamlined flows of finding what one wants, paying for it all and having the orders shipped (and tracked!) are finding their way into the B2B landscape.

As trade moves online, and as buyers and seller “meet” on platforms, payments, through embedded options, and especially embedded finance, are moving beyond discovery, bringing the “transacting” part of the equation fully online, where traditionally they’d been done offline, and even through paper checks. “The Treasurer’s Guide to AR Payment Optimization,” a PYMNTS Intelligence and CheckAlt collaboration, noted that 40% of all B2B payments in the U.S. are still made via check.

The shift to digital platforms and consumerization of B2B has had a tailwind for a few years. In an interview with Karen Webster toward the end of 2022, as supply chains remained volatile, Bryzos CEO Shep Hickey and  ChemDirect President Dave Haase said the steel and chemical industries (their platforms’ respective focal points) continued to digitize and modernize B2B activities.

In Bryzos’ model, as had been discussed, the firm will automatically fund the seller’s bank account, which eliminates the need to extend credit or chase collections. Partners can underwrite the financing decisions in real time to make sure the financing is appropriate.

The Desire for Embedded Financial Services

Supply chains may have stabilized a bit since then but some pressures in the inflationary environment that has become a hallmark of doing business are still evident. By embedding payments — and offering optionality, even buy now, pay later (BNPL) where possible, the speed of cash flow is improved. As spotlighted by PYMNTS Intelligence earlier this year, small and medium-sized businesses (SMBs) are especially buffeted by the “paper based” ways of doing things. Nearly 83% of smaller businesses have said they want embedded financial services tied to the platforms they use.

The continued digital makeover can be seen in the recent announcement that South African wholesale brand Shoprite is launching an eCommerce service for its Cash and Carry stores to streamline wholesale purchases. Bulk purchases can be made through what is billed as a “a fully automated online shopping system, with free delivery within a 50km radius.” In reference to payments optionality, Shoprite will accept various payment options for both online and in-store purchases, including credit and debit cards, EFT, store credit, cash upon collection and Shoprite’s Money Market Account.

Hundreds of Billions of Dollars at Stake

Separately, Shopify has detailed triple-digit gains across its platform for B2B-related gross merchandise volume for its fourth quarter and said volumes had doubled overall, as measured in 2023 vs. the previous year. Management has said during conference calls with analysts that the total addressable market for offline and B2B is estimated at more than $450 billion.

Amazon Business, Amazon’s online business-to-business procurement store, last month announced a number of new technology features designed to help large business customers simplify the way they shop for business supplies. Among the company’s offerings, the Amazon Business App Center includes integrated shopping, accounting management, expense management, rewards and recognition inventory management and business analytics, providing a single point of discovery. For larger orders of more than 1,000 items or more than $10,000 in total value, Integrated Quoting helps B2B firms generate custom quotes for bulk orders.

Last month, Dubai-based FinTech Comfi reportedly secured a $5 million debt facility to expand its B2B payment platform and support its launch of an embedded BNPL solution. The funding will also facilitate $40 million in B2B transactions across the United Arab Emirates and Saudi Arabia over the next year.

And as reported in January, Cybrid, a provider of embedded finance application programming interface (API) solutions, has expanded its FinTech API platform to include B2B payments. The platform boasts high transaction limits designed to handle large-sum payments.