The emergence of BNPL for business is seen as a game-changer in the commerce industry. But what kind of SMEs benefit the most from it?

In this current era of the new normal, the importance of Buy Now Pay Later (BNPL) services cannot be underestimated. Although historically, its emergence predates the current pandemic, BNPL for business is seen as a game-changer for the current situation of the commerce industry.


As BNPL continues to bloom, it is unwise if businesses disregard it altogether. However, looking at the benefits of BNPL for business, some SMEs are set to gain more than others from integrating it into their systems.


What is BNPL?


BNPL is a payment option available at checkout that allows customers to order and receive their purchase right away. There is no need for full payment upfront. Instead, they pay by instalments over time.


How is this different from other payment methods such as traditional credit cards? The answer is the absence of charged interest. There are, however, fees for late payments.


Recently, credit card networks like Visa and Mastercard have started to partner with various BNPL platforms to allow more merchants to piggyback off these networks and allow such services to be used. This proves that BNPL is an attractive option to the customer.


What does BNPL for business look like?


The whole model of BNPL for business, from start to finish, looks like this:


  1. A BNPL firm goes into partnership with an SME/retailer
  2. That retailer offers BNPL as a payment method
  3. The customer selects the BNPL option at checkout. This works for both in-store and online purchases
  4. The customer receives their items immediately, and pays them back over time


How long and how many times a customer has to make repayments will depend on which provider he uses.


What kind of SMEs benefits the most from implementing BNPL for business?


All types of business can benefit from BNPL but you set to gain more if you are the following types of SMEs:


  1. Have good profit margins

Banks and credit providers that offer BNPL services place charges on both the customer and the merchant. This fee is higher compared to traditional payment methods. If your business often has low gross profit margins, the added cost of higher merchant fees might raise the immediate cost of sale.


However, if you have good profit margins, the benefits and sales you receive by adopting BNPL for business far outways the cost.


  1. Offer a lot of high-priced products

Most consumers are not able to make big purchases as they can’t afford the item at the time of purchase. However, as BNPL allows them to pay instalments without interest, these big purchases become possible.


In an interview with Al Jazeera, Afterpay co-founder Nick Molnar said that customers use his service for primarily high-money buys. Your SME can do the same by using BNPL to help push the sales of high-priced items.


  1. Your target audience is the young crowd

Because BNPL is such a new concept, it’s no surprise that the younger crowd has gravitated towards it. In a report on the BNPL industry by, it was revealed that a whopping 87% of consumers between the ages of 22 and 44 have expressed interest in BNPL.


  1. Need financing for their own funds

SMEs often apply for financing to strengthen their own funds. As you will discover as you read this article further,  BNPL financing has more benefits for SMEs compared to traditional financing.


SMEs can also use BNPL to finance their own funds!


Other than integrating BNPL into their payment system, SMEs can also apply for BNPL financing for their own funds!


SmartFunding is a fintech company that connects Investors and Borrowers. We offer alternative short-term financing options for businesses, with a 100% focus on SMEs and startups.


SmartFunding currently offers two financing options for your business:

  1. Term Financing
  2. BNPL


Our BNPL financing allows you to run your business smoothly with our procurement financing solution. This option provides SMEs with the flexibility to finance the purchase of goods and services, with zero upfront payment, and instead make instalment payments over 6-9 months. We also provide a simple and transparent fee structure. Funds will be disbursed straight to vendors.


Our financing options are accessible to companies that fulfil the following criteria:

  • Have been operating for more than 1 year
  • Annual revenue of at least S$150,000


We may also review companies that do not meet the above criteria on a case by case basis. Please contact us for a free consultation via:

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