Moving the B2B Checkout Experience Closer to B2C

The COVID-19 pandemic resulted in e-commerce being ingrained into each of our daily habits. As consumers, our reliability on online portals for goods and services skyrocketed. But as we move towards the future, it is B2B e-commerce that is fast becoming the subsequent frontier for investors and founders. The pandemic forced businesses to move online, and this emerging B2B e-commerce and marketplace infrastructure has started to fuel a new growth wave which is expected to touch $3.6 trillion annually in Gross Merchandise Value (GMV) by 2024.

While B2B is racing towards becoming the next big thing in online commerce, a major component that holds it back is the checkout experience due to its inconsistency and lack of seamlessness. The checkout process possesses a huge area of opportunity to become a game-changer for B2B e-commerce globally.

B2B eCommerce Challenges

B2B e-commerce has been restricted due to the non-existence of cloud-based infrastructure and deep-rooted behaviours. Though the e-commerce space is evolving at a fast speed, there are certain aspects of B2B purchases that increase the complexity of the purchase as compared to B2C e-commerce. These constraints span these three areas broadly.

Payments: While players such as PayPal and Stripe integrated card payments in consumer e-commerce, the B2B space has always faced a challenge. The average transaction fees of 3% to 5% becomes a lot for sellers who deal in high-value transactions and they do not feel comfortable paying this surcharge. It is undeniable that cards have their own perks of ease and convenience. However, they do turn out to be expensive options, especially in cross-border B2B e-commerce. Currently only 10% of the B2B payments take place online due to the innovative inadequacy in the B2B segment, most of the solutions were introduced to cater to the B2C segment.

Permissions: The lack of infrastructure to verify the legitimacy of the buyers and sellers causes friction in the purchase path. B2B transactions go through multiple stages such as the contracting stage and procurement stage and require approvals and sign offs at each stage. This delays the transaction by up to as long as a few weeks. There needs to be a unified platform that can conduct buyer and seller verification and even handle disputes.

Credit: Most of the B2B transactions are finalized on credit ranging from days payable to working capital loans. These applications used to require paper forms and multiple internal credit department reviews. This further slows down the transaction time, costs a lot, and puts businesses at a risk due to all the sensitive information paper handling.

All this makes the instant purchase of B2B goods online difficult.

How is ‘checkout’ the solution?

Modern checkout is the answer to the B2B industry's shortcomings; it combines digital payments, credit, fraud, identity, and much more. It forms a robust network that can build trust and enable single-click transactions on a huge scale.

It is potentially rewarding and offers value to all the entities involved – the buyer, seller, and the checkout provider. By bringing down the friction in B2B transactions, a huge bottleneck will be eliminated for multiple businesses. Self-serve is the gold standard for friction-less interactions. A McKinsey report supports this through a study conducted in 2020 which states that most of the B2B seller interactions became remote or digital that year. A few trends that have been incorporated to move the experience of B2B closer to the B2C are:

1.     Non-card digital payment rails

Until the recent past, the digital alternative to paper checks was ACH or interbank clearing payments system. These take around two to three days, making it unfit for e-commerce. However, ACH governing bodies are trying to make this faster by introducing advancements such as same-day ACH. Same-day ACH grew by 133% from 2020 to 2021. While ACH payments were transitioning into real-time payments, with account validation and subsequent increase of the dollar limit on RTP, digital payments became more affordable. These rails can be accessed via API and can ensure cost-effectiveness as well as an easier B2B checkout. A similar real time digital solution is Omoney’s escrow services which offers speed and convenience.

2. Growth in credit-led superior digital platforms

Though card payments drove consumer e-commerce in the past decade, it has not received as much traction in the B2B space. Credit cards are undoubtedly a great tool to extend a day's payable but they turn out to be quite costly. There has been a rise in start-ups that are focusing on other credit-led superior digital platforms. These companies comprise everything from B2B neo banks (new age banks that offer financial services virtually) to credit-led products, and this digital foundation augments the B2B checkout process.

3. Digital identity

There is a dire need to consolidate the consent based services (location based access/ single click payments etc.), in order to unlock B2B e-commerce and ensure an effortless check out as a result of it. One-click transactions need to be incorporated by collating all the available data into a single digital profile.

The issue is that all the seller and buyer information is often siloed and made unreachable in Enterprise Resource Planning (ERP) systems. This makes it very complex at the buyer level. What can the buyer purchase> how much? who approves? Advancements in machine learning and the emergence of API infrastructure are breaking this pattern and allowing automated business verification and reduced risks. The net effect ensures faster checkout, precise credit decision-making, and an opportunity to build a robust buyer and seller network.

4. Buy now, pay later (BNPL)

There has been an increase in the BNPL trend for consumers with the integration of lending products at the Point of Sale on B2C e-commerce platforms at the time of check-out. Options such as no-cost EMI and pay later are very common on the consumer platform. However, there is a huge discrepancy in days payable when it comes to SMEs and large businesses in B2B transactions. This offers B2B BNPL the potential to become a huge opportunity in the business e-commerce space. Checkout is an obvious distribution partner for B2B BNPL platforms, as it collects data across businesses and can safely save buyers’ digital identities. Omoney makes collecting and disbursing international payments cheap, fast and transparent.

5. International payments

There is a need for an international payment infrastructure since B2B commerce is fundamentally global. FX payments are known for their notorious difficulty and high expense; but Omoney escrow enables simplification of global payments through low processing fees, easy checkout platform, transparency, and competitive FX rates. We make it easier for B2B checkout platforms to facilitate global payments.

The role played by Omoney to strengthen the future of e-commerce by its B2B checkout offering

At Omoney, we have created a B2B check-out platform for e-commerce businesses and marketplaces. We integrate in the form of simple check-out buttons such as Pay with Escrow, Direct Payment, or BNPL and make it possible for B2B e-commerce to fully monetize their check-out platform.

The process:

Step 1: Buyer initiates the checkout

Step 2: Buyer chooses the preferred payment option. These options depend on the location of the buyer and include various payments options such as wire transfers, credit cards, and local payment methods

• Cards and the majority of the local payment methods take place in real-time. For wire and local bank transfers, we provide the designated bank account details to which the buyer can push the payment to.
• Funds are safely held in an Escrow account with licensed banks.
• The marketplace is informed of the payment status via webhooks. This gives transparency to the customers to view the payment status, real-time from the marketplace’s dashboard.

Step 3: Omoney releases the payment to the seller’s account. Fees and commissions are settled into the platform’s bank account.

Omoney even offers customized integration through REST API and can also verify shipment documents, thereby taking on the liability of buyer protection. Through options such as buy now pay later, milestone payments, and recurring payments, Omoney offers additional value-added services. We provide a full seamless checkout experience on the client’s platform without any set-up fee and are a much more affordable option than most B2C check-outs that cost over 3%. By digitizing B2B payments, we hope to facilitate the consumerization of business transactions. When business sellers have access to the right payment mechanism, including the best payment system for small businesses, alongside an effortless user experience; B2B e-commerce experience is only bound to move closer to its B2C counterpart.