What Is B2B Buy Now, Pay Later? An NZ Guide
B2B buy now, pay later lets one business buy from another and pay in instalments, while a third party pays the supplier in full shortly after the sale. It is the business version of what Afterpay does for shoppers, but built around invoices worth thousands, terms measured in months, and a company rather than an individual.
What B2B BNPL Means
Strip away the branding and there are only three parties. A buyer wants goods now and the cash later. A supplier wants paying now. A provider stands between them: it settles the supplier's invoice and collects fixed instalments from the buyer, charging a fee for carrying the gap.
In New Zealand you will also see this called business instalment payments, supplier instalments or instalment financing. There is no legal definition that makes one label correct, and no difference in the flow of money between them. Is instalment financing the same as BNPL? covers where the words diverge in practice, and what business instalment payments are is the best place to start if you want the mechanics first.
How It Differs From Consumer BNPL
The comparison with Afterpay, Laybuy and Klarna is the fastest way to understand it, and also the fastest way to get it wrong. The mechanism rhymes; almost everything around it is different.
| Consumer BNPL | B2B BNPL | |
|---|---|---|
| Who buys | An individual shopper | A registered business |
| Typical value | Tens to hundreds of dollars | Thousands to tens of thousands |
| Typical term | A few fortnightly payments | Several monthly instalments |
| What is assessed | The individual, often instantly | The business, and often the specific invoice |
| Where it appears | At online checkout | On an invoice, at checkout, or applied for directly |
| What it competes with | Credit cards and lay by | Trade credit, trade accounts, overdrafts and loans |
| Who pays the fee | Usually the merchant, plus late fees | Split: a merchant fee and a buyer instalment fee |
| Why it is used | Affordability and convenience | Working capital and cash flow timing |
The last row is the important one. A shopper uses BNPL to afford something this week. A business uses it because the money it is owed arrives after the money it owes falls due, which is a structural timing problem rather than an affordability one. See the Cash Flow guide and the cash conversion cycle.
How It Works in Practice
From the two sides of the same transaction:
If you are the supplier. You offer instalments as a payment option on the invoice or at checkout. The customer picks a term. You are paid the full invoice amount shortly afterwards, less a merchant fee, and the provider collects the instalments. The invoice never ages in your debtors ledger, so it does not push up your debtor days, and you are not the one chasing payment.
If you are the buyer. You apply with the supplier's invoice. If approved, the provider pays that supplier in full and you repay in fixed monthly instalments for a fee you see before confirming. Your supplier is paid on time, so your account and limit with them are unaffected.
What it is not. It is not a loan or an overdraft, because it settles a specific invoice rather than putting cash in your account. It is not invoice finance, which advances money against invoices you have already issued to your own customers. It is not purchase order finance. And it is not asset finance for something you will keep, like a vehicle. See purchase order finance in NZ and the Invoice Finance guide for the neighbouring products.
Who Uses It in New Zealand
On the supply side, wholesalers and trade suppliers whose customers ask for terms they would rather not fund themselves: packaging, building materials, electrical and lighting, food and beverage distribution, medical and veterinary supply, commercial furniture and manufacturing inputs.
On the buying side, businesses whose costs land before their revenue does: trades buying materials before a progress claim is certified, retailers and e commerce sellers buying seasonal stock, and anyone facing a single order larger than their usual month. The Stock Finance guide covers the buyer side in depth.
Where PaidTerms fits. PaidTerms is a New Zealand provider of exactly this. The customer chooses 3, 6 or 9 monthly instalments, the supplier is paid in full within 12 hours, and PaidTerms collects. The merchant fee is 1.5% and the customer's instalment fee starts from 3.95% for three instalments, shown before they confirm. A buyer can apply with an invoice from any NZ business supplier, who does not need to be signed up; overseas suppliers are not supported. See pricing.
Every B2B BNPL Article
Start Here: The Category Explained
- What Are Business Instalment Payments? — the mechanics, in plain English
- Is Business Instalment Financing the Same as BNPL? — same mechanism, different vocabulary
- How Business Instalment Payments Work in New Zealand
- What Are Embedded Instalments?
How It Compares
- Business BNPL vs Trade Credit: What's the Difference? — who funds the gap, and who carries the loss
- Trade Accounts vs Business Instalments
- Trade Credit vs Invoice Finance
- Business Loan vs Supplier Instalments: Which Costs Less? — both converted into dollars on $24,000
- Alternatives to Trade Credit for NZ Business Customers
For Suppliers Offering It
- How to Offer Payment Terms Without Becoming the Lender
- Buy Now, Pay Later for Wholesale Customers in NZ
- When to Offer Instalments in Your Sales Process
- How Flexible Payments Increase Average Order Value
- The Hidden Cost of Offering Trade Credit
Related Guides
- Trade Credit guide — how credit between businesses works
- Invoice Finance guide — funding invoices you have already issued
- Stock Finance guide — the buyer's side of paying suppliers
- Payment Terms guide — what Net 30, EOM and the 20th of the month following mean
Let Your Customers Pay in Instalments While You're Paid Upfront
Your customer chooses 3, 6 or 9 monthly instalments. PaidTerms pays you in full within 12 hours and collects the instalments. The merchant fee is 1.5%.