B2B: fractional payments target the corporate market

French fintech Pledg, which specializes in fractional payments, has developed a BNPL (Buy Now Pay Later) solution for businesses in conjunction with Allianz Trade, the world's leading credit insurer.

A B2B solution developed by Pledg and Allianz Trade

Having already won over consumers, fractional payment players are now targeting businesses. French fintech Pledg and credit insurance specialist Allianz Trade have joined forces to develop a BNPL solution for e-retailers and B2B marketplaces.

Business customers will therefore be able to pay their suppliers in inst alments, and can also take advantage of deferred payment, just like private customers on consumer e-commerce sites. For suppliers of goods and services, this solution offers protection against late payment and non-payment.

In a joint press release published on September 8, Allianz Trade and Pledg explain their motivation to develop a fractional payment solution for professionals by the boom in B2B e-commerce. In 2015, online purchases accounted for just 18% of B2B sales, compared with 24% in 2020. This share is expected to rise to 33% by 2025.


The rise of business-to-business e-commerce

Until now, however, the growth of business-to-business e-commerce has been hampered by a limited payment experience that is far less optimal than that offered to consumers.

Now, with the solution offered by Pledg and Allianz Trade, professionals will be able to pay for their purchases in 30 or 60 days, without impacting suppliers' cash flow.

To achieve this, Pledg and Allianz Trade have divided up the roles: Pledg provides BNPL technology on a white-label basis, as it has done for individuals since the end of 2016, while Allianz Trade is responsible for analyzing the financial health of companies.

" Everything happens in a fraction of a second, without the end user even realizing it ," explains Mickael De Sa, Head of Digital Acceleration at Allianz Trade in France, in the release. " The solution developed jointly with Pledg is linked via APIs to our databases, which contain financial, strategic and commercial information from over 80 million companies worldwide. "

The solution developed by Pledg and Allianz Trade thus appears to be a digitalized, more fluid version offactoring. This short-term financing method involves companies transferring their trade receivables to a "factor", a financial institution charged with collecting these invoices in return for a commission.

" We need to help companies prepare for the new world of e-commerce [...] I'm convinced that we will succeed in developing BNPL in the world of B2B e-commerce, and that this technology will offer companies greater fluidity, simplicity and security in their transactions ", said Laurent Treilhes, CEO of Allianz Trade in France.

Allianz Trade and Pledg aren't the only fractional payment players coveting the corporate market, which according to Bloomberg is worth $700 billion.

Several fintechs, attracted by the tempting commissions in the B2B sector - transactions are 10 times higher there than with private customers - are trying to conquer this new market, following the example of Mondu and Billie, two German fintechs that recently raised substantial funds for this purpose.

For their part, Klarna and Alma, who owe their success to fractional payment solutions for consumers, are also turning their attention to B2B.