Trade credit and B2B BNPL both let business customers pay later — but they work very differently. Trade credit puts the risk on the supplier. B2B BNPL removes it entirely.
Trade credit is a payment arrangement where a supplier allows a business customer to receive goods or services now and pay the invoice later — typically within 30, 60, or 90 days.
It is one of the most common payment methods used between NZ businesses, particularly in wholesale, manufacturing, and trade supply sectors.
Under trade credit, the supplier is essentially acting as a lender. They deliver the goods, issue an invoice, and wait for the customer to pay. During that period, the supplier carries all the financial risk.
B2B BNPL (Buy Now Pay Later) is a payment solution where a third-party provider — like PaidTerms — pays the supplier upfront, and the business customer repays the provider over scheduled instalments.
The end result for the buyer is similar to trade credit: they get flexibility to pay over time. But for the supplier, the experience is completely different. They receive full payment immediately, with no waiting, no risk, and no debtor management.
| Feature | Trade Credit | B2B BNPL (PaidTerms) |
|---|---|---|
| When supplier gets paid | After 30–90 days | Upfront |
| Who carries credit risk | Supplier | PaidTerms |
| Buyer payment structure | Lump sum at invoice due date | Scheduled instalments |
| Late payment risk | High | None for supplier |
| Debtor management | Supplier's responsibility | Not required |
| Cash flow predictability | Uncertain | Predictable |
| Credit assessment | Supplier manages | PaidTerms manages |
| Admin overhead | High — invoices, follow-ups, statements | Low |
| Bad debt exposure | Yes | No |
For buyers, both models offer flexibility to pay over time. But for NZ suppliers, the difference is significant.
No. With trade credit, the supplier extends the credit and waits to be paid. With B2B BNPL, a third-party provider pays the supplier upfront and collects repayments from the buyer. The buyer's experience is similar, but the supplier's experience is completely different.
Yes. Some NZ suppliers use B2B BNPL for new customers or larger orders, and maintain trade credit for long-standing accounts they trust. The two models can complement each other depending on the customer relationship.
B2B BNPL typically involves a fee paid by the supplier or the buyer, depending on the platform. However, the cost is often offset by the immediate cash flow benefit, the elimination of bad debt, and the reduction in admin time spent managing accounts receivable.
From the buyer's perspective, B2B BNPL often offers more structured flexibility — clear instalment schedules rather than a single lump sum payment due at 30 or 60 days. Many buyers prefer the predictability of knowing exactly when each payment is due.
Yes. Trade credit remains the dominant B2B payment model in New Zealand, particularly in wholesale, building supply, and manufacturing sectors. B2B BNPL is an emerging alternative that is beginning to gain traction as NZ businesses look for ways to improve cash flow without restricting buyer flexibility.
For a full explanation of what B2B BNPL is, see What Is B2B BNPL In New Zealand?
To understand the mechanics of how payments are structured, see How Invoice Instalments Work For Businesses.
PaidTerms gives NZ suppliers the ability to offer flexible payment terms without carrying the risk of trade credit. Get paid upfront on every transaction while your customers pay over instalments.
The same flexibility. None of the wait.