BNPL providers expand installments as a service to grow through the uncertainty

The trend: BNPL providers are increasingly courting businesses with installment as a service solutions as gathering economic storm clouds threaten to knock the sector’s gangbusters growth off course.

Affirm is now BigCommerce’s preferred BNPL provider

  • Ecommerce platform and software provider BigCommerce expanded its partnership with Affirm so any BigCommerce merchant can use Affirm’s Adaptive Checkout, which offers biweekly and monthly payment options, per a press release.
  • Sezzle had been BigCommerce’s preferred BNPL partner since August 2021. The switch opens up Affirm to BigCommerce’s massive payments volume: Its retail ecommerce gross merchandise volume (GMV) will hit $9.24 billion in 2022, according to our forecasts.
  • And given that 70% of BigCommerce’s clients are enterprises, Affirm will be able to access a much wider market.

Splitit and Telispire team up to bring BNPL to big-ticket mobile devices

  • Telispire, a wholly owned subsidiary of the National Rural Telecommunications Cooperative (NRTC), integrated Splitit's Installments-as-a-Service platform into its technology stack and billing system, per a press release. This lets Telispire's mobile virtual network operator (MVNO) customers offer installment payments to subscribers for their devices and services.
  • Spiltit launched the platform in May; university ecommerce platform OCM was the first merchant to use the white-label product. The tie-up with Telispire will help the offering gain traction as other BNPL giants also expand into BNPL as a service.

The bigger picture: Economic uncertainty has taken a toll on the BNPL sector.

  • Valuations are sinking: Klarna’s valuation dropped by 85% between June 2021 and July 2022, for example. At one point, Affirm’s stock price had fallen more than 88% from its November 2021 high.
  • The BNPL industry is also under regulatory scrutiny. The Consumer Financial Protection Bureau (CFPB) opened an inquiry into Affirm, Klarna, Afterpay, PayPal, and Zip in December to determine the risks and benefits of BNPL products. And last month, it opened an inquiry into Apple’s BNPL offering. New guidelines from the CFPB could lead to compliance costs and reworked products.
  • Fears of a recession are also disturbing the industry. An economic slowdown would hamper future growth, as providers would likely approve fewer loans to protect against consumer risks.

Expanding BNPL as a service can help providers like Affirm and Splitit keep growing during this uncertain time and reach more of the 79.0 million people in the US who are expected to use BNPL this year, per our forecast.

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.

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