Capchase Wants to Add BNPL to the World of SaaS

Growth capital firm Capchase has unveiled an installment payment tool for Software-as-a-Service (SaaS) companies.

Capchase Pay is a B2B buy now, pay later (BNPL) solution designed for SaaS businesses that sell via long-term, annual contracts, the company announced Thursday (May 11).

According to a news release, the product “acts as a financier” for buyers who wish to purchase and access a SaaS product right away but pay for it over time. Buyers can pay in installments, while Capchase Pay gives the vendor the full payment up front.

“Investors and VCs are tightening their purse strings and demanding better margins, and as a result companies are slashing their budgets,” the company said.

“The appetite (and resources) to buy new tools that require expensive, lengthy contracts that need to be paid upfront just isn’t there any more — so sales cycles are slowing down, or even grinding to a halt.”

As PYMNTS has reported, BNPL for B2B payments offer many of the same benefits that BNPL does in the consumer space, only on a larger scale. The biggest advantage is its lack of interest payments, so long as all installments are made on time, in contrast to traditional credit, which can leave businesses paying annual percentage rates (APR) of up to 60%.

“By reducing interest payments, businesses can make B2B purchases much more cheaply, acquire more inventory and afford more premium goods and services from their suppliers,” PYMNTS wrote in March. “This, in turn, could result in increased sales to customers who would otherwise patronize big-box stores, as smaller organizations can offer competitive pricing.”

And as noted here earlier this year, there’s some precedent for a business spreading out payments for goods and services over time, something that’s part of the fabric of B2B payments.

After all, people have negotiated payment terms as long as businesses have existed, though the system is at best inefficient and at worst a drag on creditors’ cash flow.

For companies selling to enterprise clients — and embracing BNPL as a payment method — there’s the benefit of getting paid at the time of the transaction.

“The BNPL provider pays and generally takes on the risk that is tied to late or unpaid invoices (in effect, underwriting the buyer),” PYMNTS wrote. “There’s a positive impact to the supply chain itself, no matter the vertical, as goods are delivered on within the agreed-upon timeframe.”