Will Indian BNPL 2.0 disrupt B2B? – TechCrunch



Both as a term and as a financial product, “buy now, pay later” has become common in recent years. BNPL has evolved into a variety of forms today, from small-note fintech offerings on consumer payment platforms and marketplaces, to closed-loop products offered in marketplaces such as Amazon Pay Later (qu ‘they now also extend to outdoor use). You can also see some variations offered by companies that want to expand the scope of consumption and consumer credit.

Globally, BNPL has experienced the strongest growth in the consumer segment and has driven retail consumption and lending in recent years. Consumer BNPL offers are a good alternative to credit cards, especially for people who have no credit history and cannot get credit from banks. That said, a specific BNPL product vertical is gaining ground – a target aimed at small and medium-sized enterprises (SMEs). This new vertical is known as “PME BNPL”.

BNPL can be particularly useful when flow-based underwriting or transaction-based underwriting is used to provide credit to small businesses.

B2B commerce in India is moving online

Electronic commerce has seen tremendous growth in India over the past decade. The surge in smartphone and internet penetration has resulted in the rapid growth of e-commerce in large and small cities. Consumer credit has also taken off in parallel, as credit cards and digital loans have boosted credit-based consumption in offline and online stores.

However, the large B2B supply chain enabling the booming retail market was plagued by bottlenecks and inefficiencies as it involved a plethora of middlemen and streamlining became a big deal. A number of tech players have responded by organizing the previously disorganized B2B commerce market at different touchpoints, inserting convenience, pricing and easier access to products through technological logistics and a supply chain. modern.

B2B and B2C Online Penetration in India in 2019

Image credits: Straighten

India’s B2B e-commerce space has grown rapidly since 2020. Small businesses have shifted from using paper to smartphone apps to manage a significant portion of their day-to-day business, resulting in disruption pervasiveness of the way businesses conduct their transactions today. The COVID-19 pandemic has also forced small businesses, which previously used physical means to source goods and services, to try new online models of doing business.

Graph illustrating the growth of the B2B retail market in India

Image credits: Straighten

Additionally, the widespread promotion by the Indian government of an instant payment system in the form of the Unified Payment Interface (UPI) has changed the way people send money to each other or pay merchants for their products. goods and services. The next step in solving the B2B digital puzzle is to build credit into every transaction and invoice.

Online B2B Investments in India 2016-19

Image credits: Straighten

If we compare online B2B transactions to the offline world, there is only one missing link: the terms offered to small businesses by their supplier / distributor or seller. Businesses, unlike consumers, must buy goods and services in order to eventually exchange them, or add value and sell to consumers or others down the value chain. This process is not immediate and has a certain time cycle attached.

The longer sales cycle means that many small businesses require credit payment terms when purchasing inventory. As B2B commerce grows and grows through digital means, a BNPL product that meets the needs of SMEs can support their growth and ease the burden on their cash flow.

How is BNPL general public different from BNPL PME?

A BNPL PME product is a purchase financing product for small businesses dealing with suppliers, distributors, aggregation platforms or B2B marketplaces.


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