There is an increased interest in Buy Now, Pay Later (BNPL) products both for B2C and B2B markets.
There is an increased interest in Buy Now, Pay Later (BNPL) products both for B2C and B2B markets. This was highlighted at Mastercard’s Buy Now, Pay Later APAC Summit headed by Ben Gilbey, SVP, Digital Consumer Solutions, Asia Pacific, in early December 2021.
Demand for Commercial BNPL products is especially high in Singapore, in which 80% of respondents expressed interest in installment payments for small businesses in a Mastercard survey result. In India, 77% of the respondents expressed interest in commercial BNPL.
Mastercard sees further growth in opportunities to attract more commercial clients to avail of this new payment solution. About 75% of those who own small and medium-sized enterprises worldwide who have used BNPL for personal purchases said that they would likely embrace a similar payment scheme for their business.
BNPL Small Business Funding Solution
The BNPL industry is booming in the new normal or during the COVID-19 pandemic. Before BNPL, small businesses faced great challenges finding loans favorable for them. With BNPL, finding a funding source is made a lot easier. Mastercard’s BNPL commercial card provides more flexible financing options for entrepreneurs or small business owners in the Asia-Pacific.
According to the payments company, the new Mastercard Pay & Split card enables commercial cardholders to purchase supplies and equipment from 80 million merchants worldwide in monthly or periodic installments. In this way, business owners can easily make installment purchases from suppliers and improve cash flow management. This payment scheme eliminates the problems associated with fragmented payment plans and the hefty fees and interest rates from traditional or business loans.
The annual gross merchandise volume of the consumer-oriented “Buy Now, Pay Later” or BNPL industry is set to exceed US$1 trillion globally by 2025. About 19% of consumers surveyed across the globe use installment plans as their preferred payment methods, while 50% are likely to consider using BNPL in the future. The figures of Millennials are even higher at 22% and 59%, respectively.