How BNPL can benefit small business


The role of small and medium businesses in the Australian economic landscape is unparalleled. Not only do they offer employment opportunities to over 6.8 million people, but they also provide significant economic growth and innovation to local and rural communities.

This strength has allowed us to enter a space where we can inspire and empower SMEs to take their business to the next level through interest-free and flexible payment terms for credit lines via Buy Now, Pay Later (BNPL) solutions.

After a tough few years, the priorities of SMEs have shifted to achieving the two C’s — cashflow and confidence — and it’s here that we see a twofold opportunity for BNPL to help them not only recover post-COVID, but to thrive.

1. Becoming a BNPL Merchant

A simple way to stimulate business growth for SMEs is by integrating with a BNPL solution so that consumers can buy what they need at check out and repay the BNPL provider over an instalment period.

Sell to customers that use BNPL

Most BNPL providers offer businesses flexible payment solutions for consumers with no establishment fees and full payments for purchases made to the business without the need to chase customers.

An RFI Australian merchant study data recently indicated that over the last 12 months, 86 per cent of merchants have seen an improvement in one or more sales metrics since they started accepting BNPL with 65 per cent seeing an increase in sales conversion and 60 per cent seeing customers make purchases more frequently.

Energise your business with additional benefits

BNPL providers enable customers to spread the cost of their purchases over a schedule that meets their needs with zero interest, making it a more attractive option over credit cards.

They also bring in additional benefits such as introducing new audiences to a merchant’s existing customer base, boosting conversion by removing shoppers’ buying hesitations, increasing average order value (AOV) and opening a new stream of income via loan interest.

Shift the financial risk with third-party business finance

Becoming a BNPL merchant also ensures a flexible pathway for customers who may not have the funds upfront to feel comfortable enough to spend when they need to. As a merchant, not only will you get paid in full but BNPL providers assume the credit risk of the customer not paying follow-up instalments.

2. Using a BNPL B2B Solution

Just as consumer BNPL solutions were created to help customers stabilise their cashflow, Business-To-Business (B2B) BNPL solutions were established to offer flexible and transparent lines of credit for SMEs looking to source working capital quickly.

Faster, fairer and flexible solutions

Some providers can approve eligible applications anywhere between a few minutes to one day. There are also fee-free and interest-free options out there and SMEs can expect a flexible repayment period from some B2B providers.

Pay almost anywhere – Comprehensive coverage

For some business owners that have credit accounts across multiple suppliers, juggling various accounts, repayment terms, fees and due dates can get difficult to manage. For example, a business in the construction industry might have multiple credit accounts across several supply stores. A single B2B BNPL account can be used to pay any bill or invoice and the small business customer can shop anywhere that visa is accepted using the digital card solutions

Cleaner reconciliation at tax time

A business BNPL account will also centralise business credit transactions in one place, making it easier for you or your accountant to find and reconcile business expenses at tax time.

Be fearless

We have also heard from our customers across a broad range of industries about the challenges of balancing the timing of revenue coming in versus expenses going out and how they use BNPL solutions to bridge the timing gap.