• Ion Fratiloiu, Head of Commercial at Yobota 


• 07.02.2022 04:00 pm
#BNPL

Buy now, Pay Later has proven to be one of the fastest growing, most talked about trends in finance in recent years, with usage trending consistently upwards among consumers. Split payment solutions can now be found in the checkouts of some of the world’s largest online retailers, and even in physical stores. 

The appeal to consumers is clear – BNPL makes lending flexible, transparent, and accessible, with payment plans available that charge zero interest. People with steady incomes and limited capital could increase their short-term spending power and snap up new goods and services whenever it suited them. Retailers have benefitted from the ensuing surge in expenditure, and BNPL providers have grown rapidly in number and scale. 

It must be noted, however, that BNPL is not a license for consumers to spend with abandon; like loans and credit cards, users are still borrowing money, and misuse of BNPL can incur serious debts and damage one’s credit rating. Forward-thinking, financially literate consumers should view BNPL as a tool with which to improve their financial well-being and better manage their liquidity and cash flow. 

Down to business

BNPL is not only an appealing prospect for consumers – the next big trend in fintech is likely to be BPNL for Business, which brings the benefit of split payment solutions to businesses of all sizes and descriptions.

Financing is a major concern for businesses – particularly startups and small- to medium-sized enterprises (SMEs), who typically have less working capital. Conventional financing options for businesses exist, though these can be slow-moving and inflexible. 

BNPL may be a better fit for small businesses; take, for example, a small subscription-based business that needs short-term financing to level up. Funding rounds and incubators are not always a realistic choice, and conventional financing might not offer the exact terms that suit the given business model. With a BNPL solution, this company can select their preferred terms and repayment plan, offsetting the cost against guaranteed future revenue. 

Fledgling retailers can also look on BNPL as a potential source of revenue – with modern core Banking-as-a-Service (BaaS) solutions, any business can set up its own embedded BNPL products with ease, allowing more consumers to engage with their business and maintaining the integrity of their checkout without relinquishing control to a third-party BNPL provider.

The next big thing 

The stage is set for BNPL for Business to establish itself as a major financial trend for 2022; the success of B2C BNPL has proven the potential of embedded finance, and the benefits for business are clear. It is always heartening to see new enterprises succeed in establishing themselves in the market, and BNPL for Business could be an ace up the sleeve of many prospective new entrepreneurs. 

From launching his financial career at Deutsche Bank, Ion spent a number of years consulting in the equity capital markets space and leading sales growth for FTSE500 company Fiserv and core banking provider Thought Machine. He joined Yobota in 2021 to launch its commercial operation, leading GTM strategy and building a diverse and multi-faceted team to take the company to the next stage of growth.