EU BNPL Growth Is Fueled By Demand For Flexible B2B Payments
B2B payments are driving purchase now, pay later (BNPL) in Europe. BNPL has exploded in the business-to-consumer (B2C) sector, but investment rounds and partnerships have helped BNPL businesses grow.
In January, Berlin-based B2B BNPL provider Mondu raised $13 million, and Santander, Allianz Trade, and Two released a new BNPL solution for large companies. Hokodo and Lemonway joined forces to help B2B markets offer trade credit online.
B2B lenders use BNPL solutions to meet a wide range of business credit needs. Businesses need flexible payment options because of how busy they are.
Mondu targets wholesalers that want to increase sales by giving business clients extra time to pay. Like in the consumer arena, it lets companies include BNPL choices in their online checkout flow, while Mondu checks consumers’ creditworthiness and assumes the risk of non-payment.
Mondu expects a bigger payoff in B2B, despite the very foundation.
According to Philipp Povel, the company’s co-founder and co-CEO, “while B2B BNPL is lagging behind the consumer BNPL market, we believe there is a $200 [billion] opportunity just in Europe and the United States, which is larger than the global consumer BNPL market.”
After partnering with French FinTech Lemonway, Hokodo is now targeting marketplace platforms.
Hokodo will use its risk assessment technology, and Lemonway will contribute platform payments and compliance experience to the new service. The two organizations intend to quickly integrate BNPL into Europe’s B2B markets, offering flexible prices to thousands of buyers and sellers.
Enterprise BNPL Solution
Hokodo is pursuing marketplace eCommerce to meet SMB demand for BNPL, while Santander, Allianz Trade, and Two are going after large businesses.
The loan solution from the three companies meets enterprise clients’ complex and capital-intensive needs. It combines the eCommerce BNPL knowledge of Two, Santander’s heavyweight capital, and Allianz’s underwriting.
Through the agreement, Allianz Trade will offer credit insurance, Two will power the new platform’s technology, and Santander’s Corporate and Investment Banking (CIB) subsidiary will fund the loans.
With a global bank and one of the biggest insurance companies in the world, the new platform is made to serve international businesses and provide BNPL services across cross-border supply chains and multiple currencies.
