Trading Partners May Make Lending Decisions More Quickly Using In-House Credit Bureaus


While the buy now, pay later (BNPL) solution has grown in popularity in recent years and continues to influence payments in the business-to-consumer (B2C) market, analogous models such as trade credit have existed for decades, if not centuries, dictating how much time buyers had — typically 30 to 60 days — to pay suppliers back for products purchased.

While retailers are not new to offering trade credit to their business customers, evaluating eligibility may be complicated and time-consuming. Louis Carbonnier is the CEO of Hokodo, a French B2B BNPL company.

He pointed to Hokodo’s own technology, credit, and analytics stack, which the firm uses to gather its own data and produce its own credit ratings, as an example of how this challenge is driving the emergence of in-house credit agencies, which can make speedier choices for buyers without depending on third parties.

“Being able to divide varied firms in a country with a high degree of granularity and isolate the areas that are acceptable for payment terms is a good technique to bridge the financing gap in the economy and alleviate liquidity worries that suppliers and consumers may have,” he added.

Today, the French BNPL provider, which is also accessible in the United Kingdom, France, Spain, Germany, Belgium, and the Netherlands, has amassed a database of 40 million European enterprises to aid in the underwriting process.

Don’t Ruin Your Online Shopping Experience

Another big pain factor for merchants, according to Carbonnier, is the absence of suitable options for managing payment conditions while selling online.

To address this, some merchants attempt to cobble together some of the incumbent payment solutions, subjecting their business clients to a lengthy process of applying for trade accounts via their websites, downloading and filling out forms, submitting financial statements, and often waiting up to 48 hours for the merchant to approve the trade credit.

“That ruins the entire online purchase experience,” says Carbonnier. It’s not like making a one-click Amazon payment.