Strategic partnerships continue to aid the buy now pay later industry growth in 2023

Print

Email

Despite the valuation slump experienced by major buy now pay later providers over the last 12 months, the broader market has remained resilient amid the current macroeconomic environment. Driven by factors such as increased adoption among consumers across age groups and the need to better manage their finances during a high inflation period, the global BNPL industry is poised for accelerated growth in H2 2023 and H1 2024.

The market growth will be also aided by strategic partnerships between BNPL providers, financial services firms, and banking institutions globally. In Q2 2023, several collaborations have been announced in the fast-growing space worldwide, leading to new product launches and innovation in the sector.

• Standard Chartered, for instance, announced a Lender of Record Partnership with Singapore-based BNPL provider Atome. Under the strategic alliance, the two firms have co-created and launched a mobile-first consumer payment solution and financial services. Since April 2023, over 100,000 BNPL transactions have been booked under the Lender of Record partnership.

The alliance will enable Standard Chartered to double its retail base. For Atome, on the other hand, the collaboration will enable the firm to accelerate its growth trajectory. The partnership will also be rolled out in Malaysia, after successful implementation in Singapore and Indonesia. The collaboration comes on the back of a US$500 million investment in Atome by Standard Chartered in October 2021.

In another strategic partnership, Citizens Financial Group announced that the firm had entered into an alliance with Wisetack to offer a B2B2C service. The collaboration, announced in June 2023, will enable the bank to ramp up its small business BNPL loans service. For Wisetack, on the other hand, this is the first major strategic partnership with a banking institution.

BNP Paribas is another banking firm that entered into a strategic collaboration with BNPL provider in Q2 2023. BNP Paribas and Numeral, in May 2023, entered into a partnership with Alma, one of the leading BNPL providers in the European market. The collaboration will automate millions of payments every year to merchants, thereby enhancing customers’ shopping experience.

The partnership, between the three firms, comes at a time when merchants are adopting new payment solutions that cater to the demand of their shoppers. In Europe, Alma has been rapidly expanding its merchant network having partnered with 11,000 retailers. This collaboration will further accelerate the growth and scale for Alma from the short to medium-term perspective.

In India as well, BNPL providers are seeking to forge strategic alliances with banking and non-banking institutions. Simpl, for instance, announced that the firm plans to enter into collaborations with banks as it aims to reach 150 million customers by 2024. Furthermore, the BNPL provider is also targeting to boost its merchant network from the existing 26,000 to 100,000 over the next two years.

In another banking collaboration, actyv.ai entered into a strategic partnership with Unity Small Finance Bank in India. The alliance with enable the firm to offer BNPL services to small and medium-sized businesses in the country. With the demand for credit growing year over year in India, the collaboration is expected to accelerate the growth for B2B BNPL providers from the short to medium-term perspective.

Some of the other strategic collaborations that took place in the broader BNPL market include the alliance between Worldpay and Affirm, Majid Al Futtaim and Tabby, APPS and Splitit, and PAYONE and Payla and VVRB. All of these partnerships will enable merchants to offer BNPL payment options to their customers in their respective regions. For instance,

• The multi-year collaboration between Worldpay and Affirm will enable Worldpay merchants to offer their customers bi-weekly and monthly BNPL payment options. This will, therefore, enable the merchants to capture new sales opportunities and drive revenue growth.
• The partnership between Majid Al Futtaim and Tabby, on the other hand, aims to replicate the success of the BNPL model in the omnichannel ecosystem. Currently, the BNPL offering from Tabby is available only at a handful of Majid Al Futtaim's UAE mall tenants. The service is also available when shopping online with Carrefour and Majid Al Futtaim’s lifestyle brands. In Phase 2 of the partnership, the retailer plans to launch the BNPL payment method across the GCC region.
• The alliance between APPS and Splitit and PAYONE and Payla and VVRB will also bring the payment option to more customers, thereby driving the gross merchandise value and volume over the next three to four years.

Going forward, PayNXT360 expects more such strategic collaborations between BNPL providers, financial services firms, and banking institutions. This will lead to new product launches and wider adoption of the BNPL payment method globally, thereby aiding the competitive landscape and industry growth over the next three to four years.

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