The buy now pay later (BNPL) concept has been primarily centered on the business-to-consumer sector. During the pandemic outbreak, the payment method exploded in terms of consumer adoption. Low-cost financing and higher purchasing power were among the factors that drove the demand for BNPL schemes globally. In 2023, the payment solution is slated to gain increasing traction in the business-to-business segment as well.
Many new players are entering the market to serve the growing demand for flexible payments among businesses. The trend is especially strong in the European region, where the B2B BNPL segment picked up pace in 2022 and is further continuing in 2023.
The collaboration between Hokodo and BNP Paribas comes two months after the alliances between Hokodo and Lemonway. The alliance between Hokodo and Lemonway was aimed at helping B2B marketplaces in Europe to offer B2B BNPL online.
On the other hand, the foray of BNP Paribas into the B2B BNPL space comes after Santander also launched a B2B BNPL offering for large corporates in collaboration with Two and Allianz in January 2023. These collaborations and the subsequent entry of banking giants into the B2B BNPL space are driving the competitive landscape in the European market.
Along with strategic partnerships, venture capital and private equity funding are also flowing at an accelerated pace in the European B2B BNPL sector. Mondu, for instance, announced that the firm had raised an additional US$13 million as part of its Series A round in January 2023. Europe-based B2B BNPL providers have been also raising capital rounds to expand their global presence.
The flurry of activities in the European B2B BNPL space, including strategic alliances and funding rounds, indicates that the sector is poised to record strong growth from the short to medium-term perspective.
The trend of strategic alliances is also gaining strong momentum in other regions of the world, including in Asia Pacific and North America, as firms are seeking to capitalize on the growing demand for flexible B2B payments.
PayNXT360 expects more such strategic collaborations to emerge in the B2B BNPL space outside Europe from the short to medium-term perspective. The demand for working capital amid the current macroeconomic environment, coupled with the need for flexible payment solutions among businesses, will keep aiding the B2B BNPL sector growth in the global market. Consequently, PayNXT360 also expects more players, including banking institutions, to mark their foray into the fast-growing sector in 2023.
Amid growing regulatory scrutiny, reduced consumer spending, and a high-interest rate environment, the B2C BNPL sector is struggling to maintain the growth rate it achieved during the pandemic period. Consequently, in 2023, PayNXT360 expects the B2B BNPL market to drive the next growth phase for the global BNPL market.
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