BNPL was first developed to allow merchants to grant flexible payment terms to their buyers online. But this same system works in an offline environment as well, such as a brick & mortar shop where customers come to buy supplies.
At the in-store checkout, buyers have the option to pay the basket total in full, or to set up deferred payment when a BNPL solution of the kind that our fintech payment partners provide has been integrated in the in-store merchant’s payment system. If they choose deferred or flexible payment, they will get an automatic decision regarding the terms, made possible by the credit insurers’ real-time credit risk assessment. When the next payment is due they will receive an automated notification (usually a payment link), and can pay with a credit card or wire transfer.
Let’s take an example we are all familiar with: builders need to buy supplies for a renovation project from a hardware store – sometimes several stores depending on their needs. They can go to the stores, pick up the supplies they need, and set up deferred payments at the checkout at each store if their solvency allows. Thanks to a BNPL solution, the hardware stores will be able to offer deferred payment, which attracts more clients, without taking on any nonpayment risk. Deferred payment suits the builders better, since they’re being paid in installments for the renovation project. All in all, a win-win situation.