By 2025, the global BNPL industry will grow 10-15x its current volume — topping $1T in annual gross merchandise volume. Both B2C and B2B businesses have noticed that despite any pushback, BNPL quickly becomes a must-have payment option. And more entrepreneurs each day realize that it’s better to control this monetization and retention tool instead of letting a third-party lender get all the fruits of their client-converting labor.
But starting to offer pay later option is a new challenging venture for most product and service providers. We’ve written this in-depth research to help you navigate this space in an informed manner and avoid the mistakes business owners commonly make.
This white paper is for three types of people.
- Those considering BNPL as a business opportunity and looking for a meaningful introduction to the space
- Those ready to offer BNPL in the business-to-consumer vertical
- Those ready to offer BNPL in the business-to-business vertical
To make sure every one of you finds the information they need in this piece, we’ve divided it into three major chapters – Intro to BNPL, B2C pay later, and B2B pay later.
Table of contents
- Part I: What you need to know before entering the BNPL space
- Intro to Buy Now Pay Later
- What benefits BNPL provides
- Meaningful Buy Now Pay Later adoption statistics
- Regulatory pushback and the rise of ethical lending
- Part II: Getting started with Buy Now Pay Later in the B2C space
- The difference between B2C and B2B Buy Now Pay Later programs
- Why offering a Buy Now Pay Later option is a must for a B2C business
- Partnering with a BNPL lender vs launching a consumer financing program in-house
- Cost-effectiveness of keeping BNPL in-house vs using a third-party lender
- How to automate your B2C BNPL program the right way
- Why TurnKey Pay Later for B2C financing
- Part III: Buy Now Pay Later in the B2B space
- The unbelievable size of the opportunity
- What kind of companies need B2B BNPL most
- The forms B2B Buy Now Pay Later may take
- The logic behind offering B2B BNPL in-house
- Challenges of B2B Buy Now Pay Later automation and solving them
- Conclusion
Intro to Buy Now Pay Later
Letting your customers pay for products or services in several installments if they can’t afford to foot the bill in one go is an idea that has been around since the invention of money.
Up until recently, it was almost impossible to offer Buy Now Pay Later consumer credit at the point of sale unless you are a bank or a large alternative lender. The reason being – it used to be too hard to accurately evaluate credit risk and even if you had the capacity for it, underwriting took too long.
Times have changed. Traditional lending done in person through banking branches is riding into the sunset and working with credit digitally is swiftly becoming the new norm. And when a conservative space goes digital, the entry barrier into this space gets lower.
Customer expectations and online comfort standards are formed by the Ubers and Amazons of the world. And despite their best efforts, most traditional lenders can’t address the current demand for a low-to-zero-interest point-of-sale pay later options. This creates an enormous market gap for affordable, seamless, and secure customer finance. See supporting data in the Buy Now Pay Later adoption statistics section.
In the past, you needed immense resources and expertise to start and run a lending business. Now technology has made credit more democratic than it has ever been. Any entrepreneur can partner with a lender like Affirm or even have their Pay Later program automated and running in-house. Which in our, slightly biased, opinion is a lot better.
The most obvious potential beneficiaries of the rise of BNPL are B2C and B2B product and service providers that want to implement a Pay Later program of their own instead of outsourcing lending profits and benefits (like loyalty, retention, and control) to a third-party lender.
You may be a retailer, equipment manufacturer, healthcare provider, renovation contractor, airline, or any other company that sells a product or a service that you would sell more of if people could pay in installments.
But first, wanted to check if you (or your staff) would like this white paper on how to offer financing to customers in-house