Amazon Business is bringing buy now, pay later (BNPL) to business purchasing through a new partnership with Affirm, giving companies the option to finance purchases ranging from office supplies to equipment into monthly installments. The move underscores the growing demand for consumer-style payment flexibility in the B2B market.
The offering is designed to give businesses a more granular tool to manage cash flow and budgets, particularly at a time when inflation and elevated interest rates have made liquidity more important than ever. By extending installment payments to business purchases, Amazon Business is also giving smaller merchants an alternative to credit cards.
“This is a natural extension to the growth that we’ve seen in small business credit cards,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “According to the U.S. Census, 90% of the 34 million small- to medium-sized businesses in the U.S. report revenues of less than $1 million.”
“Even though credit is extended largely on the strength of the owner, it’s important for business owners to keep their business expenses separate from personal expenses, and business credit is a great way to do that,” he said. “The buy now, pay later products offered by Affirm are another tool now available to SMBs to better align expenses with cash flow. This is especially true for seasonal businesses that invest in upgrades during their off-season or during slow periods.”
Measuring the Risks
The ability to pay in installments has been well received by consumers, many of whom view BNPL as a useful budgeting tool. However, concerns remain that some borrowers could become overextended by accumulating BNPL debt, which is often not reported in the same way as conventional credit card debt.
Accurately assessing creditworthiness is just as important for small businesses. And to that end, Affirm said it will use its proprietary underwriting technology to gauge merchant creditworthiness.
Experiencing Culture Shock
The addition of BNPL is likely to resonate with merchants who have become focused on the quality of their payments experience. For many younger business owners, a robust, digital-first payments experience is now a baseline expectation. That shift is one reason some business owners with outdated financial infrastructure are finding it harder to attract buyers.
One of the biggest drivers behind this change is the consumer experience, where transactions are often inexpensive, transparent, and nearly instant. As consumers become business owners, many experience culture shock when confronted with the slower billing cycles and more cumbersome payment processes in commercial environments.
Those changing expectations are fueling a shift in the business payments landscape, not only by expanding payment options, but also by pushing business payments to more closely resemble the speed, convenience, and transparency consumers have come to expect.