BNPL has been very widely used.

How about B2B BNPL?

"B2B BNPL has the potential to become the fuel in a supply chain engine—quietly powering businesses to move faster, smoother, and farther by bridging the gap between ambition and cash flow."

This the next instalment in our series of viewpoints on embedded finance and role it will play in commerce globally. This article co-authored with my colleagues, Alexander Katzenschläger Mohammad Nikkar, PhD and Dr. Daniel Fabisch , we explore the burgeoning potential of B2B Buy Now, Pay Later (B2B BNPL), a financing model poised to potentially revolutionize B2B commerce (not dissimilar to what B2B2C BNPL did for Retail and now gaining traction across multiple sectors).

Unlike its B2C counterpart, B2B BNPL addresses the liquidity and working capital challenges faced by businesses, especially MSMEs, while offering streamlined, flexible payment terms. With the global B2B commerce market valued at $120 trillion, we estimate that B2B BNPL could capture as much as 15-20% of the total market by 2030, translating into a trillion-dollar opportunity.

Key considerations for providers include managing debt burden, ensuring transparency, and mitigating adverse selection. The viewpoint outlines various strategies banks can adopt to leverage this opportunity, such as developing in-house capabilities, partnering with fintechs, or acquiring BNPL solutions.

Author

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