Trendspotting: Persistently hot inflation and a tougher climate for companies looking to access short-term loans is providing buy now, pay later (BNPL) firms with opportunities to expand into business payments, according to Bloomberg.
The opportunity: Already established as a service for shoppers looking for staggered interest-free payments, BNPL companies can also provide short-term financing to businesses, an industry estimated to be worth $700 billion, per Bloomberg.
Why it could work:
What’s holding it back?
The big takeaway: A recessionary environment could create opportunities for BNPL to target cash-hungry SMBs with short-term funding needs.
But fintechs that already operate in the B2B BNPL space—like Resolve, Behalf, and Vartana—have a head start to capitalize on growing demand. And expanding away from retail and into business finance will be risky, bringing its own set of challenges.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.