B2B Buy Now Pay Later (BNPL) is a flexible payment solution that allows people to purchase goods or services now and defer payment to a later date, making cash flow management easier. B2B Buy Now Pay Later (BNPL) offers easy repayment schemes, which makes everyone eligible to use the services and buy whatever they want despite not having the entire amount to purchase their favorite product or service.
More and more people resorted to online shopping for groceries, daily essentials, home appliances and more during the pandemic. The trend is continuing even today, and because of this, the market capitalization of e-commerce businesses (in India alone) is expected to grow up to a whopping $99 billion by 2024! Powered by the B2B Buy Now Pay Later (BNPL) option of these E-commerce sites, many youngsters, small business owners, students and first-time purchasers are encouraged to shop for what they want.
Due to the popularity of the B2B Buy Now Pay Later (BNPL) payment mechanism, more and more companies have been encouraged to adopt this in their business model as well. It has almost become a new-age lending process today, helping many small businesses to continue their operations. Keep reading to know more about the industries that benefit the most from BNPL.
The popularity of B2B Buy Now Pay Later (BNPL) schemes has brought forward a huge business opportunity for many industries in the recent past. Of all the embedded finance technologies available in the market today, BNPL has become one of the most sought-after by these industries. Even traditional banks like HDFC and ICICI have started to include BNPL products in their usual offerings, to lure young customers and small businesses.
Out of all the industries that have benefitted the most from B2B Buy Now Pay Later (BNPL), the fintech industry has to top the list for obvious reasons. Until a decade ago, fintech companies were not even half as popular as they are now. Today, the BNPL schemes have helped them enter into markets that they couldn’t explore earlier, and tap the huge potential of millennial & Gen-Z shoppers and MSMEs (medium & small-scale enterprises).
Many fintech companies allow customers to create an account, shop from various online sites and pay for them at a later date – all through their app or website. Some fintech companies like Simpl give 15 days to customers to clear their shopping expenses. While it doesn’t charge any interest rates for offering this 15-day credit period, it charges penalties for late payments, like all other fintech companies. Lured by the easy credit, these fintech companies attract millions of customers to their apps or websites, thereby earning a lion’s share of profits from the B2B Buy Now Pay Later (BNPL) payment method.
Gone are the days when people used to line up in queues outside banks and financial institutions for loans. Thanks to the B2B Buy Now Pay Later (BNPL) option, many online lending companies disburse loans within minutes, thereby doing away with the long processing time and complex documentation banks required. Medium and small-scale industries use financing options through these BNPL models to buy raw materials in bulk, manage their working capital and run their businesses.
Many lending companies like Lazypay disburse loans up to Rs 1,00,000 for a fixed term and a reasonable rate of interest. The quick and paperless credit disbursal process attracts first-time borrowers, students and others who don’t have enough documentation to get loans from banks. Some other apps like Flexmoney, connect its customers to the broad, untapped potential of the BNPL market. This way, it helps its customers get financing from other BNPL players in the country. The BNPL payment mechanism is slowly becoming the face of the Indian lending industry by attracting more and more companies to get into this business model.
According to a recent study, B2B Buy Now Pay Later (BNPL) is set to contribute to about 14% of all E-commerce transactions in India by 2026. E-commerce giants like Amazon and Flipkart, offer BNPL schemes on most of their products currently. Customers can buy whatever products they want on these sites, and pay for them in monthly installments, a luxury that is now starting to become a way of life. This way, customers have more power over their shopping than ever before.
Easy repayment options, instant credit, a reasonable credit period, quick documentation & application process and partial repayment processes are some benefits that e-commerce platforms offer their customers through the B2B Buy Now Pay Later (BNPL) mechanism. These features attract visitors to these sites to buy their favorite products. As a result, these sites have a high conversion rate, leading to increased profitability.
Though BNPL was introduced mainly as a medium for business-to-customer transactions, it has now become popular in the B2B segment as well, due to the increasing demand for products/services and quick financing processes. All small and medium-scale industries can now use the B2B Buy Now Pay Later (BNPL) feature to buy goods or get finance from lending, E-commerce, or fintech companies for expanding their businesses. This payment mode has definitely given the much-needed help & support to the new & upcoming small industries always needed but couldn’t get due to lack of documentation or credit history.
Reputed fintech companies like Finverv bridge the gap between the sellers and these small businesses perfectly. They help small businesses (the buyers) to buy goods in bulk from the sellers, and give them the comfort of offering monthly repayment options for a certain term. Since the B2B Buy Now Pay Later (BNPL) model is more affordable, quicker and simpler than getting a credit card or a loan, its popularity and demand are set to grow rapidly in the coming years.
