As more B2B ecommerce occurs on marketplaces, B2B embedded finance brings value to buyers, suppliers and the marketplaces themselves, writes Amanda Parker, chief growth officer of FundThrough.


Amanda Parker

For many businesses and their customers, embedded finance means paying for an online purchase with PayPal, Google Wallet, or Apple Pay. Buy Now and Pay Later (BNPL) options are also gaining in popularity. Beyond ecommerce though, consumers are increasingly able to make payments within various experiences. Paying for parking through Google Maps or buying groceries through a delivery app are both noteworthy examples.

However, a comprehensive perspective shows that embedded finance is not limited to moving money. The applications are much broader. At its core, embedded finance enables brands to integrate financial services into their digital experience via APIs. Take insurance for example: when you’re buying a Tesla online, you can add on a customized policy right within the workflow. And when you make a claim, embedded finance can make it possible to accurately calculate a payment and instantly pay it out based on coverage and policies.

Now, embedded finance of all kinds is coming to B2B landscapes; one type to note is payments and purchasing. Just like consumer applications, B2B embedded finance in the context of moving money needs to deliver a frictionless experience for everyone involved in a transaction. This is especially important as more B2B buyers and suppliers expect to buy and get paid online.

The rise of B2B embedded finance

B2B payments currently account for an annual spend of more than $120 trillion, a number that is expected to grow exponentially. B2B embedded finance is increasingly becoming a requirement for companies both currently operating online or those transitioning online, especially to B2B marketplaces. It’s also becoming a requirement for apps and ecosystems where invoices are generated and paid digitally. The future of sales in the landscape continues to accelerate: Earlier this year, Digital Commerce 360 estimated that collective sales on B2B marketplaces grew 130% year over year in 2021 to $56 billion, growing 7.3 times faster than total B2B ecommerce sales. It’s easy to see why they’re skyrocketing in popularity, and why they’re fitting candidates for embedded finance.


B2B marketplaces are essentially self-service platforms that make it easy for businesses to buy and sell their goods and services online. Transactions are transparent, and finding quality suppliers is efficient. B2B marketplaces provide choice, security, agility, and value for both buyers and sellers. These solutions ease the burden of marketing, logistics, and sales while accelerating deals and payments, but B2B embedded finance adds even more value to B2B marketplaces, as well as apps, and portals.

Previously these types of platforms would help buyers and suppliers find each other, but leave the actual transaction to happen outside of the experience. Typically this included emailed invoices, ACH payments, or even snail mail and checks. Now, those that run these platforms recognize how including payments within their experiences delivers benefits they can’t afford to ignore, such as increased “stickiness” and transactions, new revenue opportunities, reduced risk, and more decision-making data. B2B marketplaces, apps, and ecosystems should no longer be asking if they should embed payment options into their platforms; rather they should be asking when. And the answer is now.

Why now?

Several factors have fueled the demand for digital buying and selling experiences:

  • The COVID-19 pandemic. Virtually overnight, online and remote options for keeping businesses going became a necessity.
  • Supply chain disruptions. Buyers need fast, easy ways to find the stock or services they need. And online options make the search more efficient. Also, the ability to get paid instantly enables businesses to pre-order goods, or even jump the queue for suppliers sending orders based on which customers pay first.
  • Millennial preference. Many of today’s B2B decision-makers are Millennials who prefer to complete an entire transaction online, whether they are paying an invoice or receiving payment. Manual processes slow down both.
  • Demand for data. The payment process is also another avenue for marketplaces, portals, and apps to gather data to improve their experience, products, and marketing to drive more stickiness, transactions, and growth.

Different needs in the B2B embedded finance transaction

There are three sides of an embedded finance transaction: buyers, suppliers, and the platforms themselves. They each have their own unique needs. For example, buyers need to buy now and pay later. Large buyers in particular are used to buying on net terms to maintain their own cash flow. And they need that option to remain available to them. They also can’t change processes or workflows to accommodate new systems.


On the other hand, suppliers need to sell now and collect now. Getting paid as soon as possible is a powerful incentive to keep them coming back to an online platform rather than defaulting to their usual sales processes. Suppliers also need to maintain cash flow, not only for daily expenses, but for growth capital. And that can be improved with fast payment options.

As for the platforms, they need less risk and more cash. To meet the needs of buyers and suppliers — and increase stickiness and transactions — many platforms are extending credit to buyers while paying suppliers quickly. The result is:

  • more risk from extending credit,
  • more spent on administrative resources to do their own underwriting,
  • less cash available to reinvest in their own businesses,
  • and a balance sheet that’s less attractive to investors than it could be.

Paying invoices within days

These stakeholders’ needs are at odds with payment expectations, and reconciling them is tough. But embedded finance options — such as AI-powered invoice factoring that pays invoices in days rather than months — satisfies the three sides of the B2B online transaction:

  • buyers maintain net terms,
  • suppliers maintain cash flow,
  • and platforms reduce their risk by eliminating the need to extend buyer credit.

Furthermore, embedded finance options like invoice factoring generate useful transaction data, increase stickiness, and boost the number of transactions on a platform.


Ultimately, the right embedded finance solution elegantly meets the needs of every stakeholder, creating frictionless B2B payments — a win-win-win.

Amanda Parker is chief growth officer at FundThrough. FundThrough is a revenue-based funding platform that got its start helping small businesses bridge cash flow gaps. Before heading up partnerships and new product development at FundThrough, she was a serial entrepreneur. She sold two venture-backed technology companies where she worked and partnered with Microsoft, 20th Century Fox, Pepsi, and Molson. Connect with her at [email protected] and on Twitter.

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