The verdict is in: tech helps companies grow their business. And even in the face of an uncertain economic environment or potential risk, BNPL solutions offer benefits.
Firstly, traders (known as merchants in the United States) don’t need to worry about the credit risks of a transaction. BNPL financing is secured and, often, backed by insurance companies. In most cases, it’s the BNPL provider that shoulders the risk of buyer default. Not, typically, the merchant.
Secondly, the solutions are especially useful for sellers seeking to engage their “longtail” customers. That is, the high number of buyers that represent a low total percentage of revenue. By automating their credit decisions, traders can turn those lower-value transactions into a higher-producing revenue stream.
Finally, as a lending stream, BNPL will remain attractive to small and medium-sized enterprises (SMEs). Underserved by traditional financial markets, these small business buyers are likely to rely on alternative solutions as the recession progresses. Even if the rising cost of debt causes providers to up their prices, suppliers would be wise to consider employing a BNPL solution to capture this market.