In this guide, we’ll look at how credit works in B2B marketplaces, the benefits and the pitfalls, and what best practice looks like if you’re running or selling through a platform.
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Credit might not be the first thing you think about when it comes to online marketplaces, but in the world of B2B, it can make or break a sale. Businesses don’t just buy one or two items at a time. They place large orders, purchase raw materials, and commit to contracts that can run into thousands of pounds. Few buyers want - or are able - to pay all of that upfront.
That’s why credit has become such an important part of the B2B marketplace model. From traditional net terms to modern Buy Now Pay Later (BNPL) solutions, offering credit helps marketplaces attract new buyers, encourage larger transactions and keep supply chains moving. At the same time, sellers can protect their cash flow with the right partner taking on the risk.
In this guide, we’ll look at how credit works in B2B marketplaces, the benefits and the pitfalls, and what best practice looks like if you’re running or selling through a platform.
In consumer e-commerce platforms, a shopper might hesitate over a £50 pair of shoes. In B2B, the contract value could be ten, twenty or a hundred times that - sometimes more. Construction firms, manufacturers, or wholesalers often need to buy large volumes of materials before they see any revenue from their own customers. Paying everything upfront simply isn’t practical.
That’s why net terms - paying 30, 60, or even 90 days after delivery - have long been the standard in business-to-business trade. Extending credit gives buyers breathing space to turn those purchases into finished goods or services, get paid by their own clients, and then settle the bill.
For marketplaces, offering flexible payment options isn’t just convenient - it’s a competitive edge. Buyers are more likely to use platforms where they know they can spread costs, and that means marketplace operators who offer credit win loyalty and build stronger long-term relationships. Amazon Business, for example, has made credit facilities a core part of its offering to win over corporate and public buyers.
You can see this in action in this customer story, where a buyer explains how much easier it is to order when suppliers offer iwocaPay.
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So what does this look like in practice?
Traditionally, marketplaces might have managed credit themselves, granting terms to trusted buyers and shouldering the risk. But this is costly and complex, especially when you’re handling global sales across various industries.
Today, many platforms use embedded financing models. These integrate with payment service providers or fintech partners that specialise in B2B credit. The process is straightforward:
Buyers can use these facilities for a wide range of business purposes, from purchasing raw materials to funding larger contracts. The structure varies depending on the provider: some use fixed fees, while others offer a more tailored approach with an indicative premium rate that reflects the size and risk of the transaction.
The advantages of offering credit are easy to see once you put yourself in the buyer’s shoes.
First, it makes larger purchases possible. A contractor might be able to buy £5,000 worth of materials today if they only have to pay later, but would walk away if they had to pay everything upfront. Over time, this leads to higher order values and more revenue for sellers and marketplace operators.
Second, it builds buyer loyalty. A convenient credit facility is something businesses will return to again and again, because it removes a major barrier to purchase. In competitive industries, that kind of relationship building is priceless.
Third, it protects sellers. When a marketplace partners with a provider like iwocaPay, the seller is paid immediately while the buyer still gets flexible terms. No one is left waiting on overdue invoices, and sellers can rely on steady cash flow while buyers enjoy flexibility.
Of course, offering credit isn’t without its challenges.
The biggest hurdle is risk management. Defaults and late payments can create a serious drag on cash flow, especially when you’re dealing with multiple vendors and high contract values. Marketplaces need systems to identify reliable buyers and keep exposure under control.
Then there’s compliance. Regulations like PSD2, and requirements for KYC (Know Your Customer) and KYB (Know Your Business), mean that credit facilities can’t just be handed out without checks. Fraud prevention tools are vital, particularly when dealing with overseas buyers.
There’s also the operational side. Marketplaces often juggle complex transactions – one order might involve several suppliers, different payment options, and even multiple currencies. Handling this at scale without the right technology is a real challenge.
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So what does good practice look like? A few things stand out:
Automate credit checks. Using open banking and alternative data makes approvals faster and less intrusive, while still keeping risk in check.
Instant settlement for sellers. Credit shouldn’t mean suppliers waiting around. Using escrow or working with providers like iwocaPay ensures sellers get their money immediately.
BNPL partnerships. Instead of building everything in-house, many marketplaces now work with fintechs that specialise in buyer credit facilities. This keeps things simple, and allows platforms to offer 30, 90, or even 12-month payment terms without carrying the risk.
Clear communication. Buyers need to know the terms up front – interest, repayment dates, and what happens if they miss a deadline. Transparency prevents disputes and helps build trust.
Tech that scales. A good credit solution integrates directly with the ecommerce platform, supports multi-currency payments, and can adapt as the marketplace grows.
With these building blocks in place, marketplaces can offer the credit buyers expect while keeping their own operations efficient and low-risk.
For B2B marketplaces, credit has shifted from a “nice to have” to a must-have. It makes it possible for buyers to place bigger orders, builds loyalty, and helps marketplaces expand into new industries and geographies.
The challenge is balancing all of that with risk, compliance, and the need to keep sellers happy. That’s why more platforms are choosing to partner with fintech providers who specialise in marketplace credit.
With iwocaPay, for example, buyers can Pay Now or spread the cost over months, while sellers still get their money upfront. It’s a simple way to support both sides of the transaction - and create a marketplace that grows without the cash flow headaches. Book a free demo today to see how we can help you grow your marketplace.
