Strategic alliances lead to new BNPL solutions in 2023

Print

Email

Although consumer adoption of buy now pay later schemes has been growing consistently since the pandemic outbreak, the ever-expanding ecosystem has significantly aided the rise of the BNPL market. Strategic collaborations between fintech firms, retail partners, and e-commerce marketplaces have led to the rise of new BNPL solutions and the trend has further continued in 2023. These alliances are providing users with BNPL schemes in the B2B space, cross-border payment capabilities through short-term lending, flexible payment options on global e-commerce marketplaces, point-of-sale financing, and interest-free payment plans for select retailers and merchants.

• Billie and Mollie, for instance, entered into a strategic collaboration to deliver B2B BNPL services across Europe. The partnership will see the integration of Billie’s B2B BNPL solution into Mollie’s payments application programming. The launch of the new BNPL scheme gives business customers 30 days to pay for their purchases, while the merchants selling those products are paid upfront. As of March 2023, the firm launched the solution for businesses in Germany and is expected to be launched in more European markets before the end of 2023.

In the B2B space, Tabit also partnered with Lenovo to offer BNPL solutions for business customers in Canada. In another strategic alliance, Lendica made its embedded finance integration available for Shopify and Salesforce. Allianz Trade in Asia Pacific and Bueno.money also forged a partnership on B2B BNPL. Venture capital and private equity firms are foreseeing growth in the B2B BNPL space and expect the segment to be the next growth driver for the global BNPL market. The flurry of strategic alliances also indicates that the sector is poised to record strong growth in 2023.

In addition to a growing focus on the B2B sector, BNPL providers and fintech firms are also entering into strategic alliances in the B2C segment, catering to the varied needs of consumers worldwide.

• In February 2023, Western Union announced that the firm had forged an alliance with Beforepay to launch a remittance-focused BNPL solution. Under the collaboration, the two firms will facilitate cross-border money transfers, while allowing consumers to access short-term lending solutions. Leveraging the wage-advance product offered by Beforepay, consumers will be able to borrow A$200 through Western Union’s digital channels.

To facilitate cross-border shopping, Philippine-based BillEase entered into a strategic collaboration with China-headquartered Alipay+. The strategic alliance, announced in January 2023, will enable BillEase users to shop using the BNPL payment method at more global brands online. Notably, Alipay+ has a strong network of 2.5 million global online and offline merchants, offering goods across different product categories.

Klarna, on the other hand, forged a strategic alliance with Ingenico to expand its BNPL footprint at in-store checkout. The collaboration will facilitate the rollout of the point-of-sale financing solution offered by Klarna using PPaaS, which is a cloud Payments Platform-as-a-Service solution offered by Ingenico. With over 40 million point-of-sale terminals in service worldwide, the collaboration is expected to drive growth for Klarna in the in-store segment.

Like Klarna, Splitit also entered into a strategic collaboration with Ingenico in February 2023, to tap into the growing in-store BNPL segment. Both of these collaborations aim to deliver a simplified, one-touch, zero-interest BNPL solution embedded into the merchant’s existing point-of-sale terminals. Visa and Mastercard have also entered into a series of strategic alliances to launch new BNPL schemes for shoppers globally.

• Visa, for instance, announced a partnership with Malaysia-based GHL Systems Berhad in March 2023. The strategic collaboration will enable shoppers to use Visa Instalments at over 3,000 merchant outlets across Malaysia, featuring fashion, jewelry, and electronics brands.
• Mastercard, on the other hand, announced a series of collaborations to expand its BNPL program. In March 2023, the firm announced that Amount, Bass Pro Shops and Cabela’s, Deserve, i2c, Saks Fifth Avenue, Sutton Bank, and Walgreens, among others, have joined its wide array of partners.

Amid the growing demand for BNPL solutions, due to the rising interest rate and inflation environment, more such strategic collaborations across different segments are expected to emerge in the global market in 2023. Consequently, these alliances, coupled with the growing demand for BNPL schemes in B2C and B2B sectors, will keep driving innovation and market growth from the short to medium-term perspective.

To know more and gain a deeper understanding of the global BNPL market, click here.