This piece is in Forbes and discusses one of the hot button topics of the past year or two, something we have covered in both member research and various postings on these pages as well. That subject is BNPL and in this case, the contributing author focuses on the relative absence of x-border options provided by those companies offering BNPL services, which then leaves a demand gap. We typically cover B2B uses, which for this space to date is generally limited to the small business arena.
‘This landscape is putting the industry under considerable pressure, but there are undoubtedly still major opportunities in the space. A recent report by my own company, FXC Intelligence, found that the vast majority of BNPL offerings can be grouped into seven categories – app, browser extension, B2B, card, finance, marketplace and super app – although many players such as Affirm, Klarna and Zip operate across multiple models…
Recent launches from companies including Apple, NatWest, Santander and Zopa, as well as new offerings from those already in the space, including PayPal, show that there are still major opportunities in BNPL. However, one area that remains significantly under-explored is cross-border BNPL.’
The author goers on to discuss various places where BNPL lenders are leaving money on the table, including the merchant transaction fee that they typically charge a store, the actual currency conversion, and also potential late fees where applicable. Most of these scenarios are retail transactions of course, and x-border is likely in the 10-15% range of total (but we expect growing, especially in B2B cases), but there are some pretty decent and non-exotic corridors open (e.g.; U.S. and Canada) so it should be considered. The author also talks about some of the hurdles, and for many the risk profile is not worth it. Worth a quick read to get the full point.
‘Despite the challenges of cross-border BNPL, it does represent a vital means of competing in a market that is becoming increasingly crowded. Larger players with a strong international presence already offer the service, and if it provides merchants with additional sales, it is going to present a strong additional case for smaller players looking to punch above their weight.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
