In the ever-evolving world of commerce, businesses are constantly seeking ways to streamline processes and improve customer experiences. One area that has seen significant advancements is in the realm of payment solutions. Buy-now, pay-later (BNPL) options have gained immense popularity in the business-to-consumer (B2C) space, allowing customers to make purchases and defer payment. Now, a pioneering partnership between payment specialists Balance and Hokodo aims to bring the B2B equivalent of buy-now, pay-later financing to trans-Atlantic payments, revolutionizing international commerce for merchants.
The Need for Net Terms Financing in International Commerce
Net term financing, the business equivalent of BNPL (Buy Now, Pay Later) options, has become increasingly prevalent in B2C payments, simplifying transactions and improving cash flow for consumers. However, the implementation of net term financing in cross-border transactions has proven to be a challenge. This is where Balance Payments Inc. and Hokodo Services Ltd. step in, offering a solution that facilitates net term financing for merchants engaged in international commerce.
Digitalizing Invoicing and Net Term Financing
Balance and Hokodo have recognized the limitations of paper-based invoicing in today’s fast-paced global economy. In order to simplify and expedite cross-border transactions, they are replacing traditional invoicing methods with digital systems capable of offering net term financing options. Merchants will now have the flexibility to extend payment terms, such as payments due in 30 or 60 days after the sale, ultimately enhancing their business relationships and improving customer satisfaction.
Balance’s Approach to Streamlining B2B Payments
Founded in 2020, New York City-based Balance Payments Inc. identified a need for streamlining B2B payments, including cross-border transactions. By securing partnerships with financial institutions, Balance can extend credit to merchant customers, alleviating some of the financial burdens associated with international trade. Furthermore, Balance has developed an API-based risk assessment system that utilizes both in-house and public data to determine the appropriate amount of credit to make available for each buyer. This system grants automatic approvals for up to $50,000, further simplifying the financing process.
Hokodo and Balance’s role in servicing European and US merchants
To effectively cater to merchants on both sides of the Atlantic, Hokodo will service European merchants, while Balance will do the same for their US counterparts. This collaboration allows for a seamless experience for global marketplaces, such as the French company FoodoMarket, whose CEO, Eric Nivoix, expressed his enthusiasm for the partnership, stating, “The unique relationship between Hokodo and Balance means that global marketplaces like ours can expand our operations across the world without impacting the customer experience.”
Importance of Offering Payment Terms for Business Growth
A recent survey revealed that 65% of respondents believe that offering payment terms is vital for influencing business growth. However, the same survey indicated that only 16% of B2B sellers find it “very easy” to offer payment terms to buyers in new countries. This highlights the significance of the Balance and Hokodo partnership, which aims to simplify and accelerate the process of offering net term financing to international buyers, ultimately fuelling business growth for merchants.
Focus on Transatlantic Markets and Potential Future Expansion
As Balance and Hokodo embark on their partnership, they are initially focusing on trans-Atlantic markets. This strategic decision allows them to perfect their systems and processes before potentially expanding their services to other regions. By concentrating their efforts on trans-Atlantic commerce, the partnership aims to create a robust foundation for future expansion and global trade facilitation.
The collaboration between Balance and Hokodo represents a significant step forward in simplifying trans-Atlantic B2B payments. By embracing net terms financing and digital invoicing, these forward-thinking payment specialists are effectively addressing the challenges faced by merchants engaged in cross-border transactions. With their user-friendly systems and automatic credit approvals, they are providing a streamlined experience for businesses seeking to grow internationally. As the partnership evolves, Balance and Hokodo have the potential to revolutionize the global marketplace, making it more accessible and efficient for merchants around the world.