Buy Now, Pay Later

Recently, the ‘buy now, pay later’ (BNPL) business concept has been discussed extensively. The business model works by consumers buying items now and receiving them now but paying for them over a period of time in installments, the only difference between the BNPL and traditional models is that no interest is charged as long as payments are made on time. In light of current events with historically high interest rates, the business model has been nudged a little to the side however, it might be just for a temporary time.

Although there has been a drop-in business- to- consumer (B2C), the business-to-business (B2B) BNPL is predicted to be a more lucrative and advantageous business model for both the buyer and the seller. According to an article by CNBC, experts estimate that B2B BNPL transactions in Europe and the U.S. will reach $200 billion over the next few years. A few advantages as a buyer in the B2B BNPL marketplace is that it allows for the possibility to realize increased profits seeing that as long as timely payments are made there will be no interest payment that will bite into the business’ profit margins. Further, it has the potential to increase sales as it can allow businesses to lower their prices becoming competitive and thus attracting more consumers. Getting credit from B2B BNPL companies such as Hokodo, is advantageous because it is a controlled, quick and easy online credit solution for businesses rather than the tedious process of receiving bank credit, for example.

Overall, there are positive forecasts for the B2B BNPL marketplace with some predicting it will overtake the traditional way of credit-taking. However, it has given us food for thought and could be an interesting way to boost business growth.

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