Alibaba Collaborates with Slope on Business-to-Business Buy Now, Pay Later Offering
The small business segment is witnessing a robust demand for B2B financing, particularly for solutions beyond traditional card payments. In a move to address this demand, Slope, an AI-powered payments company, has partnered with Alibaba to offer a novel financing solution: "Pay Later for Business."
Through this partnership, Alibaba's U.S. business buyers will have the opportunity to avail of Buy Now, Pay Later (BNPL) as an embedded financing solution. This collaboration could potentially increase the adoption of BNPL in the B2B space, providing a more flexible and accessible financing option for small businesses.
Slope will be responsible for the lending, underwriting, and collections infrastructure of the partnership. Leveraging artificial intelligence, Slope will assess credit and manage risk for business buyers applying for installment terms.
According to Don Apgar, Director of Javelin's Merchant Payments Practice, embedded finance means presenting the product at the right time in the buyer's journey to deliver the highest acceptance rates. This partnership is a prime example of this concept, as it offers financing solutions seamlessly integrated into the shopping experience.
The partnership with Alibaba marks a significant step towards wider adoption of BNPL in the business space. This development comes after Javelin Strategy & Research's report last year, which stated that nearly half of all merchants surveyed now obtain their payment accounts from providers other than banks.
Fintechs have demonstrated that many business financing needs can't be met solely through card offerings, creating opportunities for more flexible solutions like the one offered by Alibaba and Slope. Since the 2008 financial crisis, banks have shifted their small business lending to card-based products, leaving opportunities for more innovative solutions like BNPL.
Alibaba has been focusing on smaller mom-and-pop businesses in the U.S. to drive growth. This partnership will allow qualified business buyers to apply for installment terms on purchases, expanding their purchasing power.
Offering more flexible payment options can help smaller B2B businesses expand their market reach. Consumer-facing BNPL products offer little value to merchants at the checkout page, but show growth potential on the product page. By providing embedded financing solutions, merchants can attract more customers and increase sales.
Slope expects to announce additional collaborations later this year, signaling a promising future for the adoption of BNPL in the B2B space. This partnership between Slope and Alibaba is a great example of how fintechs are building on the promise of embedded finance to revolutionise the way businesses finance their purchases.
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