With inflation causing more spending introspection, buy now, pay later (BNPL) continues branching into new use cases and verticals, building on the fashion sector where it started.
From healthcare to B2B applications, installment payments are coming to almost every point on the commerce compass as companies experiment with the benefits offered by BNPL over traditional trade credit and financing tools.
BNPL for B2B is seen as a $1 trillion market.
“It’s a very different approach [from traditional BNPL for businesses],” said Jamie Beaumont, CEO at U.K.-based BNPL firm Playter, in a May PYMNTS interview. “It’s almost like post-purchase, where we give all the control and optionality of how people pay and how long the terms are to the businesses paying. That obviously is a huge benefit to the supplier who’s looking to get paid within a 24-hour period as well.”
Read more: To Avoid Failure, BNPL for Business Must Be Customized, Not Cloned
German B2B BNPL FinTech Billie cut a deal with Klarna late last year, integrating the two services and enabling merchants already onboarded with Klarna for consumer use to switch over to the Billie BNPL payment platform for B2B purchases.
“Billie’s newly implemented payment methods can be directly activated by the businesses themselves and are seamlessly embedded in Klarna’s checkout process,” an Oct. 11 press release stated. “No additional technical steps are required by online retailers.”
Billie Co-Founder and Co-CEO Matthias Knecht told PYMNTS: “I firmly believe the need for this kind of product is ubiquitous — it’s just everywhere. You’re looking at the buyers and the challenges these business buyers have, and it’s just the same in every country.”
See more: Billie CEO on Becoming the ‘Klarna’ of the B2B Buy Now, Pay Later Market
BNPL’s Third Wave
Healthcare offers another strong use case for installment payments. In “The Payment Cure: How Improving Billing Experiences Impacts Patient Loyalty,” a PYMNTS report with research sponsored by CareCredit, 33% of patients surveyed said they did not get needed healthcare, mostly citing inability to pay.
Get the study: The Payment Cure
According to the study, 41% of users of alternative healthcare payment plans “helped them handle their other bills or expenses. Interest in alternative payment options among consumers is significant: 45% of all patients would be interested in using these kinds of payments in the future and 26% report that they are ‘very’ or ‘extremely’ interested in these options.”
CareCredit offers a consumer credit product that isn’t BNPL strictly speaking but does provide a line of credit to pay for medical costs that is then paid off as one would any other credit card.
In the education sector, BNPL pure play Affirm is funding “nanodegrees” covering various areas of finance and technology for learning platform Udacity in its “Learn Now, Pay Later” offering at an average cost of $2,000, with classes and loans to be completed in six months.
Nandan Sheth, CEO of BNPL FinTech Splitit, told PYMNTS in March that this is the second wave of BNPL, as the adaptable concept moves into more areas, transforming the credit landscape, especially for high-ticket purchases that the first wave of consumer FinTechs stayed away from.
Read more: Third Generation of BNPL Holds Potential to Reshape Entire Credit Industry
“Higher tickets have been a bit more challenging for the pure plays,” Sheth said. “For us, it’s kind of our sweet spot. If you look at our average ticket, it’s almost $1,000. Some of the others are in the $200 range. We’re taking down the open to buy and unlocking that.”
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