Keeping Customer Payments In-House a Win-Win for Businesses

It’s a strategic mistake for merchants to send customers to a third-party payment provider right at the end of their purchase journey. Instead, they should keep the customer within their own ecosystem.

That’s the insight that led to the launch of Limepay about two years ago. The payments platform company started in the eCommerce space, helping merchants build their own branded payments solutions, including everything from full payments to buy now, pay later (BNPL).

“Then, over time, we sort of looked at it and thought, ‘Hey, actually, paying in installments should live in an ecosystem wider than just retail eCommerce,’” Willie Pang , CEO of Limepay , told PYMNTS.

On April 20, the company launched a new digital business-to-business (B2B) payment system called Limepay STACK that simplifies B2B payments and offers a range of payment options, including BNPL.

See also: Payments Platform Limepay Unveils BNPL Tool

The company thinks BNPL will help companies smooth over working-capital rough spots in the B2B space, Pang said. Limepay partners with banks, with the banks doing the lending while Limepay provides credit-as-a-service that enables businesses to accept payments.

Aggregating Alternative Payment Methods

Businesses need to be thinking about how they aggregate all the alternative payment methods, Pang said.

In Australia, open banking and bank-to-bank transfers are going to be a huge opportunity.

“Account-to-account transfers, we know, will grow to be a very, very significant percentage over the coming six months, 12 months, 18 months,” Pang said.

The company has also found that midsize businesses tend to be working with eight or nine payment service providers (PSPs). Bringing them all together creates a lot of operational friction — online and offline.

“In bringing all of those things together, when we talk about a minimum of a 20% cost reduction, it’s in that raw processing cost itself, but it’s also in the operating cost of operating eight or nine different relationships to be able to offer a variety of payment for a customer,” Pang said.

Read more: Millennial, Gen-Z Digital Preferences Reshaping Embedded Finance Landscape

The company aims to make its own tech as low-code as possible for customers that want to plug it in and be up-and-running in 10 or 15 minutes while enabling very deep enterprise customization for big customers.

“Giving them the flexibility around that and configurability has been really important,” Pang said.

A Second Acceleration of BNPL Take-Up

Pang said Limepay has seen that consumers in every country around the world are worried about the impact of inflation.

“In the context of paying in installments as a way of smoothing cash flow, we think that it will actually drive a second acceleration of take-up,” Pang said.

For sophisticated consumers who know how to manage money, paying in installments is a powerful tool for smoothing cash flow and deploying capital in a way that will help their lives, Pang said.

But if BNPL use continues to accelerate, there will also be more regulation. In lots of countries around the world, including Australia and the U.S., though, Pang believes industry self-regulation has been effective at controlling bad debt.

“As it starts to increase and more and more people are using paying in installments as a way to fund daily household goods, I think it creates some risk and I think that governments are going to step in,” Pang said. “That’s going to be a challenge for this part of the sector.”