Although consumer adoption of buy now pay later schemes has been growing consistently since the pandemic outbreak, the ever-expanding ecosystem has significantly aided the rise of the BNPL market. Strategic collaborations between fintech firms, retail partners, and e-commerce marketplaces have led to the rise of new BNPL solutions and the trend has further continued in 2023. These alliances are providing users with BNPL schemes in the B2B space, cross-border payment capabilities through short-term lending, flexible payment options on global e-commerce marketplaces, point-of-sale financing, and interest-free payment plans for select retailers and merchants.
In the B2B space, Tabit also partnered with Lenovo to offer BNPL solutions for business customers in Canada. In another strategic alliance, Lendica made its embedded finance integration available for Shopify and Salesforce. Allianz Trade in Asia Pacific and Bueno.money also forged a partnership on B2B BNPL. Venture capital and private equity firms are foreseeing growth in the B2B BNPL space and expect the segment to be the next growth driver for the global BNPL market. The flurry of strategic alliances also indicates that the sector is poised to record strong growth in 2023.
In addition to a growing focus on the B2B sector, BNPL providers and fintech firms are also entering into strategic alliances in the B2C segment, catering to the varied needs of consumers worldwide.
To facilitate cross-border shopping, Philippine-based BillEase entered into a strategic collaboration with China-headquartered Alipay+. The strategic alliance, announced in January 2023, will enable BillEase users to shop using the BNPL payment method at more global brands online. Notably, Alipay+ has a strong network of 2.5 million global online and offline merchants, offering goods across different product categories.
Klarna, on the other hand, forged a strategic alliance with Ingenico to expand its BNPL footprint at in-store checkout. The collaboration will facilitate the rollout of the point-of-sale financing solution offered by Klarna using PPaaS, which is a cloud Payments Platform-as-a-Service solution offered by Ingenico. With over 40 million point-of-sale terminals in service worldwide, the collaboration is expected to drive growth for Klarna in the in-store segment.
Like Klarna, Splitit also entered into a strategic collaboration with Ingenico in February 2023, to tap into the growing in-store BNPL segment. Both of these collaborations aim to deliver a simplified, one-touch, zero-interest BNPL solution embedded into the merchant’s existing point-of-sale terminals. Visa and Mastercard have also entered into a series of strategic alliances to launch new BNPL schemes for shoppers globally.
Amid the growing demand for BNPL solutions, due to the rising interest rate and inflation environment, more such strategic collaborations across different segments are expected to emerge in the global market in 2023. Consequently, these alliances, coupled with the growing demand for BNPL schemes in B2C and B2B sectors, will keep driving innovation and market growth from the short to medium-term perspective.
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