Integrated financing in B2B e-commerce

Christian Ries, Head of International Vendor Accounts, Siemens Financial Services Commercial Finance

In my last blog I talked about B2B e-commerce and why it is so important for businesses in all industries to adopt an effective approach. After all, the opportunity is enormous.


Just to remind us all just how vast the potential is, here are a few of the eye-popping statistics. In 2021, online sales on B2B ecommerce sites, log-in portals and marketplaces increased 17.8% globally to $1.63 trillion [i]. And this meteoric growth is happening all over the world. India’s B2B commerce alone is expected to reach $1.1 trillion by 2024, as small businesses embrace the digital model of transacting [ii]. By 2025, Gartner [iii] predicts 80% of B2B sales interactions between buyers and suppliers will occur in digital channels. According to a survey by Mastercard [iv], 82% of SMEs have changed the ways their business sends and receives payments post-pandemic, with 76% having in parallel become more digital.


In this blog I would like to focus on the role that financing is playing in this B2B e-commerce revolution. Most companies have integrated some kind of payment options in their e-commerce offerings. The real question is whether those options are really adding value to the e-commerce proposition and getting more (and bigger) sales over the line. So let’s have a look at the specific benefits of integrated e-commerce finance, and how to use it.

B2B e-commerce: Motivations (and methods) for buyer and seller

For sellers (or vendors), financing options which support them to enable their e-commerce operations take the form of working capital management tools. They include lines of credit, micro-loans and invoice finance. Sellers use financing to stabilize and optimize their e-commerce cash flow. For the most part, we are talking about using financing tools to bridge the gap between the cost of production and the revenue from sales. Such financing is also used to buy more stock or invest in structural transformation. A growing number of businesses are using external financing to access working capital. Terms you may also hear used include “invoice financing”, “invoice discounting”, and “supply chain finance”.


That’s great for sellers – but this is not the financing that helps get more sales across the line.

So let’s look at the buyer’s motivations. What eases their ability to purchase? How can e-commerce financing really add to the seller’s sales proposition, differentiate from the competition, and maximize sales closure?


The answer is to offer various forms of buy-now-pay-later (BNPL) options – allowing the buyer to spread their payments over time, but also allowing you to recognize sales when they are concluded. To do this, vendors may team up with a specialist financing company.

How to integrate financing options into an e-commerce business?

When presenting these financing solutions at point of sale, one option is to offer them over an open platform. Most of the global players in this landscape did their homework and offer some kind of financing support to vendors and their customers. In fact, three types of digital platforms are expanding in financial services: (1) fintech entrants; (2) big tech firms (Amazon or Alibaba are good examples); and (3) increasingly, incumbent financial institutions with platform-based business models. The upside is that – as a user of these platforms - no extra effort on the seller’s side is needed to run the platform – the connection just needs to be organized.  The downside is the limited extent to which the look and feel can be individualized. If the intention is to use finance as a point of difference to the competition, the lack of individualization possibilities might be an issue that limits the benefits.


Alternatively, if the vendor has an own e-commerce solution up and running, a financing solution tool can be added to it. The easiest way to handle that is just to connect with the digital financing tools from the preferred provider. Good news: most financing companies do offer an easy integration of their financing tools. But they vary a great deal: from a simple calculator up to a completely automated process including customer rating and decision-making engines as well as a proper documents preparation, a lot of variations can be found. The more sophisticated the solution, the more the financing options can be tailored to a particular audience and to the vendor’s own brand – and that means more differentiation to the competition. Our version of this toolkit, even offers customer reporting and triggers to upgrade or sell in a renewal at the appropriate moment.


Sellers can always build their own solution, but this is tricky, fraught with pitfalls, and expensive. So better think about getting some real expertise from outside as well as developing a realistic mindset about the functionality which is desired. Usually, it should cover a quotation-generating tool with sample calculation options and then maybe an automated link to an external partner who – as the financing provider – will do the rest of the work such as customer rating, credit decision and document preparation. Of course, there are sometimes very good reasons to build an own e-commerce platform – but of the business case has to be very clear, as well as the budgeting for the substantial ongoing costs of maintenance and upgrade to keep pace with the market.

Embedded financing can increase e-commerce profitability

In the end the decision which solution is best should be based on the company’s ambitions. Whether integrating with an external solution or building an own financing platform, the efforts and resources needed are not to be underestimated. The only serious error would be to imagine that there is no need for some form of integrated financing options. All our vendor partner that entered into this kinds of solution remarked how quickly they get return on investment from integrated digital financing – by getting deals over the line that simply wouldn’t otherwise have happened.


Of course, at Siemens Financial Services, integrating these financing solutions for our vendor partners is our ‘wheelhouse’. So whatever stage a vendor is at, and whichever path the vendor wants to take, we can offer the appropriate support in most situations. If you are interested in learning more about the options available, please do not hesitate to get in touch.

About the author:

Christian Ries, Head of International Vendor Accounts, Siemens Financial Services Commercial Finance

Having been in the finance and leasing industry for all my professional life, I have been working on vendor financing solutions and partnership business with OEMS and distributors in various industries for the last twenty years.


As global businesses have dedicated requirements for partnering with financing support, it is my target to always find the best fitting solution for the individual situation of each partner. This includes both, traditional means, and the modern development of changing industrial environment.


Being part of the Siemens Financial Services team enables me to bring in all my experience and still develop new ways drive asset-based lending between the OEM and the end customers.