BNPL allows customers to spread out payments for goods or services without fees. Meanwhile, trade credit automation is an innovative way to quickly evaluate creditworthiness and extend net terms to B2B buyers.
The key differences are:
- Users – BNPL is an installment payment method used by buyers, whereas trade credit automation is a financial product offered by sellers and used by their business buyers.
- Financing Risk – Trade credit automation reduces financing risks when a merchant uses a lender’s platform. Without it, merchants have to self-finance their buyers when offering BNPL or net terms.
- Payment timing – Companies don’t get paid when they offer BNPL until the buyers make their payments. However, trade credit automation reduces days sales outstanding (DSO) to a day, improving cash flows and collection efficiency.