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Banks and fintechs: complementiary solutions for B2B marketplaces

20 November 2023

Business Insight

For large companies, digital transformation has become vital. Today, B2B e-commerce has overtaken B2C, with an estimated value of €150 billion – 1.5 times higher – and the sector still holds enormous growth potential. Against this backdrop, the launch of B2B marketplaces makes it possible to diversify product and service offerings, enhance the customer experience, support internationalisation, create value and optimise the marketing processes of large companies.

Despite all these advantages, developing a B2B marketplace involves several challenges. One of these is the management of financial flows in a tripartite model. To succeed, B2B marketplaces can rely on two complementary players: banks and fintechs.

Traditional banks and fintechs: players with different positioning…

As financial institutions that have been established on the market for decades, Banks bring solid experience and stability to the management of financial flows. They hold a credit institution license, subjecting them to strict constraints regarding compliance, security, and risk control. This regulatory framework guarantees security, as it minimises the risks associated with financial transactions and it protects sensitive data.

Fintechs are more recent players on the market, emerging with the advent of the Payment Services Directive (PSD) and Open Banking. They rely on innovation and cutting-edge technologies to develop innovative services to optimise the management of financial flows. Contrary to certain beliefs, fintechs are not intended to replace banks but rather to add value to them to meet the productivity challenges of B2B.

… but with complementary strengths that meet the expectations of key accounts

While the positioning of banks and fintechs is very different, it enables them to develop complementary strengths that are particularly useful for B2B marketplaces. With their robust procedures, expertise, and in-depth customer knowledge, banks offer unrivaled security and reliability in supporting large companies with a wide range of financial solutions.  

Fintechs, on the other hand, stand out for their specialisation in a specific area of the financial value chain. Their agile business model allows them to focus on developing highly innovative technological solutions. This agility and ability to create tailor-made solutions can be extremely valuable to B2B marketplaces seeking to improve their internal productivity.

When these two players join forces in a strategic partnership, B2B marketplaces can make the most of their respective advantages.

Banks and fintechs: an alliance serving B2B marketplaces.

The idea is to capitalise on the strengths of each type of player to support B2B marketplace projects. Together, banks and fintechs offer a complete range of financial services, from cash flow management to the integration of innovative payment solutions tailored to the specific needs of each company.

By bringing these two players together, marketplaces can benefit from full compliance, a comprehensive range of services, high efficiency, and speed, and to be part of a trusted ecosystem.

  •  Perfect compliance

B2B marketplaces are subject to specific regulatory constraints (DSP2, KYC and KYB, LCB-FT, GDPR). Electronic money issuer, credit institution… Depending on their license, fintechs may need to work with banks to operate their business and offer services to marketplaces. For example, banks can open escrow accounts to secure end-customers’ money, handle pay-in and pay-out, and collect and redistribute money from transactions. Fintechs, therefore, rely on banking channels and networks to carry out these operations in full compliance when necessary.

Read also: Everything you need to know about managing payments on a B2B marketplace.

  •  A comprehensive range of payment services

The collaboration between banks and fintechs is helping to develop new payment experiences on B2B marketplaces tailored to the needs of professional buyers. Banks also have a robust portfolio of customers, giving them an in-depth understanding of the challenges and needs of a given sector. Based on this expertise, banks are increasingly developing Open Banking strategies, seeking out the best in fintechs to complement their service offerings and better serve marketplaces. For example, new simplified and secure bank transfer solutions for B2B marketplaces, such as Pay by Bank, have been established thanks to data sharing. This innovation facilitates bank transfers on marketplaces, reducing the customer’s payment process to 4 quick steps: select your bank, identify yourself, authorise the transaction from your banking application and check that the transaction has been accepted.

Like Pay by Bank, the partnership between banks and fintechs opens many possibilities.

Read also: Pay by Bank: paying by bank transfer has always been challenging!

Société Générale and Lemonway join forces to support the growth of B2B marketplaces for large companies.

Société Générale, one of Europe’s leading banking groups, and Lemonway, an ACPR-accredited (the French regulator) pan-European payment institution, have signed a commercial partnership to provide comprehensive payment services to large companies launching their B2B marketplaces.

These two players with complementary approaches are committed to serving a fast-growing market whose needs still need to be covered. This innovative partnership draws on Lemonway’s business expertise in third-party payments, combined with the robustness and security of Société Générale’s cash management services.

As an expert in its sector, Lemonway offers a modular, turnkey technology that encompasses payment solutions as well as all the other strategic services that are essential for B2B marketplaces: identity verification (KYC and KYB) and opening of payment accounts, breakdown and management of flows for beneficiaries, bank reconciliation, credit insurance, various secure payment methods, etc. B2B marketplaces can manage complex transaction flows in compliance with the highest regulatory standards.

Thanks to its innovation-oriented strategy, Société Générale is establishing itself as a trusted banking partner for the growth of its corporate customers.

“Société Générale’s ambition is to position itself as a one-stop-shop for the payment needs of large corporates. But this kind of innovation doesn’t happen alone. That’s why we’ve set up this Société Générale-Lemonway partnership. We want to offer the best to our clients by enabling them to benefit from our ecosystem of payment and financial solutions.”

Perrine Vergne, Head of Payments, and Cash Management Strategy at Société Générale.

 

Would you like to learn more about the solutions we offer key accounts for launching their B2B marketplace? Then get in touch!