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UK B2B SMEs missing out on opportunity to use BNPL to grow sales

Coming directly after Santander announced its new platform, research published by Kriya, shows that the leaders of UK B2B firms do not plan to offer BNPL on their e-commerce sites for another 3.23 years, despite 92% of them having heard of the term Embedded Finance.

Businesses were using technology before COVID-19, but the pandemic accelerated its adoption, particularly among SMEs and B2B firms, as this was the only way they could survive.

As early as the summer of 2020, McKinsey found that most B2B seller interactions had moved to remote or digital channels, while a year later a London School of Economics study found that 55% of UK firms had implemented e-commerce and other new digital capabilities.

Despite this, the news that many B2B firms are not planning BNPL use imminently means that businesses are missing out on a host of key benefits that their peers that have already moved ahead with embedded finance are experiencing.

“These findings highlight a worrying lack of urgency among B2B firms to offer flexible finance and payment options like ‘buy now, pay later’ to their customers,” comments Anil Stocker, CEO, Kriya.

“These tools are now readily available and can be deployed in a matter of weeks, providing a cost-effective way to improve customer experience, operational efficiency, and cash flow.”

The UK Embedded Finance Index, snapshot across four B2B sectors, reveals the top five benefits reported by surveyed firms to be:

  • Improved customer experience (30%)
  • Faster new customer onboarding (28%)
  • More efficient internal operations (27%)
  • Improved cash flow (27%)
  • Increased sales volume (26%)

One such firm is Materials Market, a platform connecting trade buyers and suppliers in the construction industry to find the best prices and delivery times.

In the first month after integrating embedded finance, Materials Market saw a a 579% increase in trade credit transaction volume and a 186% increase in trade credit order value after two months.

The company expects embedded credit sales to grow to around 50%-60% of total transactions on its platform.

“We’ve seen significant growth in sales volume and order value since partnering with Kriya to offer credit on our platform,” says Samuel Hunt, co-founder and CEO of Materials Market.

“Suppliers like being paid up front, buyers value being able to pay in instalments, and the ability to automate and scale the provision of credit is hugely efficient for our business.”

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