B2B marketplace payments : Everything you need to know

E-commerce, e-procurement platforms, network marketplaces, circular economies... Whatever its form, a B2B marketplace is the place for financial transactions between professional buyers and sellers. But what exactly is involved in managing payments on a B2B marketplace? What factors need to be considered to ensure regulatory compliance? And how can you satisfy buyers and sellers and make your platform more attractive? Follow the guide!  

Managing payments on a B2B marketplace: offering a variety of payment functionalities

Because it's not aimed at individuals, a B2B marketplace needs to be in tune with the expectations and consumption patterns specific to the professional sphere. This calls for several specific functional features.

Deferred payment

To meet market expectations, a B2B marketplace must be able to offer payment by the due date, according to each customer's payment terms. This feature makes cash flow easier and thus attracts new buyers. By implementing "Buy Now Pay Later" or BNPL on your marketplace, your buyers can place orders now and pay later. Just like a classic consumer credit with no extra costs or interest applied, this solution, already used by many B2C sites, also meets the needs of B2B buyers. Available in just a few clicks, BNPL improves customer relations, increases sales, and builds buyer loyalty.

Credit insurance

Sellers can take out credit insurance to protect themselves against the risk of non-payment linked to payment delays. "Offering payment by the due date is an undeniable selling point for a B2B marketplace. It enables them to attract new buyers by offering them easy cash flow and, therefore, to develop traffic on the platform while increasing the value of the average basket. But if, in addition, the marketplace offers its sellers the possibility of ensuring their transactions, and thus protecting them against the risk of non-payment, it's a lever of attractiveness and differentiation". Sophie Marot-Rémy Chief Digital Officer Euler Hermes France Credit insurance applied to B2B marketplaces is a way of meeting the challenges faced by users of online sales platforms, whether small SMEs or significant accounts. This solution makes it quick and easy for buyers to pay on credit while guaranteeing sellers secure protection without going through an insurer: credit insurance establishes a score for the buyer's activity before payment to limit non-payment risk. As a marketplace, this turnkey service strengthens user confidence in the platform's payment system. It attracts new users and boosts revenues.

Dynamic pricing

While prices in a B2C marketplace are the same for everyone, the reverse is not valid in a B2B marketplace. Product and service prices may have been negotiated in advance, according to the contract terms between the operator and professional buyers. A B2B marketplace must therefore be able to display customer-specific prices.

Quantity discounts

In line with industry practice, a B2B marketplace must offer the possibility of displaying discounted prices above a specific order volume.

Multi-user rights management

Within a company, the person who places the order is not necessarily the one who can validate or pay for it. So, you need to be able to identify all those involved in the transaction and have a purchasing validation workflow in place.

Free shipping

According to a PayPal / ComScore survey, over 70% of Internet users would be tempted to go to another site or seller if shipping costs were not offered. It's an unambiguous observation that is prompting more and more sellers on marketplaces to offer free shipping on orders, especially in the B2B sector. Usually applied to products costing less than 100 or 200 euros, shipping costs are often degressive or accessible as the shopping basket becomes larger. But beware, the price displayed on sellers' stores must include these shipping costs: it is, therefore, necessary not to offer too high an amount, which could result in a drop in sales even though the seller is responsible for shipping the goods.  In this situation, dynamic pricing allows you to adapt the total price according to the volume ordered.

Additional costs

Customs charges, rerouting of the shipment... Additional costs may be added to the initial price. These contingencies must be considered when drawing up the invoice.

The need for an international outlook

To open up development prospects for buyers and sellers, the marketplace needs to be accessible in several countries, especially B2B-oriented. In addition to distinguishing itself as an expert in a specific field, internationalization offers the opportunity to increase profits. But successful internationalization doesn't mean simply duplicating your site in one or more other languages. To meet the specific payment needs of each country, it's essential to offer locally popular means and payment methods. Searching for local sellers and locally recognized brands can also be an asset in meeting local purchasing habits.

A wide range of secure payment methods

Keeping up to date with adapted payment methods is also a significant issue for B2B marketplaces, especially when professional buyers have high expectations and complex specifications. Thanks to technological innovations, there are several solutions for managing transactions, such as Pay by Link, which enables payment via a link transmitted by the seller, BNPL (Buy Now, Pay Later), which offers the possibility of a payment in several installments, or the billing mandate, which enables compensation of the invoice at a later date. It is important to comply with international and national regulations to set up one or more of these transaction methods. In addition to the General Terms and Conditions of Sale and the General Terms and Conditions of Use, marketplaces are governed by the Payment Services Directive (PSD2) at the European level. The aim is to combat fraud, terrorist financing, and money laundering while avoiding trading with unscrupulous individuals or organizations. To guard against these risks, marketplaces are encouraged to use fast and efficient buyer identity verification processes. 

B2B marketplaces and payment management: a highly regulated ecosystem

In addition to managing various payment flows through different functionalities, a B2B marketplace is subject to a strict regulatory framework. The fact that it collects payments on behalf of third parties exposes it to various regulations and directives:

• PSD2. To better protect consumers, the European Payment Services Directive requires marketplaces to develop strong authentication for card or bank transfer payments.
• KYC & KYB. Introduced by the ACPR, this procedure requires companies to collect and analyze the information they need to know about their customers and merchant partners to protect them against the risk of fraud.
• LCB-FT. The directive on the fight against money laundering and the financing of terrorism (LCB-FT) requires marketplaces to have a register of beneficiaries to identify individuals who may benefit from the economic activity of the companies they hold.
• GDPR. Since B2B marketplaces harvest users' data for smooth operation, they are subject to the General Data Protection Regulation. Coming into force in 2019, the RGPD aims to protect people's rights when it comes to the processing of their data.

3 solutions for managing payments on your B2B marketplace

As intermediaries, marketplaces must collect funds from buyers before passing them on to sellers. This activity is assimilated to the provision of payment services and is regulated by the ACPR (Autorité de contrôle prudentiel de résolution). To comply with regulations, B2B marketplaces have three options:

• Manage your payments on your own by applying to the ACPR for approval
• Applying for exemption from approval
• Outsource the provision of payment services to a PSP

The PSP guarantees payment management for a B2B marketplace

The Payment Service Provider, or PSP, already holds a payment institution license from the ACPR. The PSP's responsible for carrying out the various compliance checks required to ensure that the marketplace is fully compliant. The PSP is also responsible for providing the payment interface for buyers and for controlling capital and fund transfers to sellers. While its role is crucial in the payment process, the PSP's intervention remains invisible to marketplace users. As a true partner to marketplaces, the PSP relieves the marketplace operator of all payment management tasks. For B2B marketplaces, the PSP offers many advantages:

• PSPs' expertise in payment management guarantees a smooth, optimized customer experience, enabling the platform to increase its conversion rate. Depending on the users' expectations of the platform, choosing a PSP offering payment methods adapted to these expectations is advisable.
• With pan-European licenses, PSPs such as Lemonway provide adequate support for marketplaces wishing to expand internationally in full compliance with European and international regulatory requirements.
• Originating from Fintechs, PSPs are designed to be modular and responsive. The teams who design these turnkey solutions draw on the latest innovations and technologies to stay one step ahead. As a result, PSPs are constantly evolving and being enhanced with new tools and services, while deployment and support are tailored to the needs of each marketplace operator.
• Complemented by dashboards, PSP provides a 360° view of operations and transactions. These ergonomic management tools offer an optimal user experience and feature instant export of documents in pdf, CVS, and other formats.

This way, PSPs enable marketplaces to concentrate on their core business and what they do best: develop their business. Moreover, they help define the right strategy to convert the maximum number of payments and limit shopping cart abandonment.   Lemonway is a certified payment service provider available worldwide and is already supporting numerous B2B marketplaces with its innovative solution: 

• A reliable, powerful, and scalable API that has already proved its worth with thousands of platforms in France and abroad. New functionalities can be tested and added at any time.
• This activity is protected by an instant KYC incorporating OCR technology (Optical Character Recognition) to read all digital documents, analyze their information and check their correspondence with the associated user's account. Ultra-fast, this new version of KYC enables transactions to be finalized securely in record time!
• Numerous payment methods (CB, Visa, MasterCard, Sepa Credit Transfers, Sepa Direct Debits, Paylib, Chèques bancaires, iDeal, etc.) and various currencies.

Tailored to your needs and customers, our solution maximizes your B2B platform's chances of success! Contact us to find out more.