Buy Now Pay Later

What is Buy Now Pay Later?

Buy now, pay later (BNPL) refers to a type of financing option that allows consumers and businesses to purchase goods or services and pay for them at a later date. BNPL is often offered as an alternative to traditional credit card financing, and can be a convenient way to make purchases without having to pay upfront. BNPL typically involves the customer paying a small upfront fee and then making regular payments over a set period of time, with the option to pay off the balance in full at any time.

Business challenge

Overall, any business that needs to make purchases but does not have the funds available to pay for them upfront may benefit from BNPL financing. Some businesses may more specifically need BNPL to finance their activity:

• Small and medium businesses that rely on significant capital expenditures and have a limited treasury and access to other forms of financing.

• Businesses with seasonal or irregular cash flows that need to smooth out their cash flow.

• Businesses with deferred customer payments such as car manufacturers that need to finance their operations.

• Businesses that need to make large or unexpected purchases despite not having the funds available.

Businesses seeking BNPL financing may face challenges such as difficulty meeting eligibility requirements, high costs, limited payment options, complex documentation requirements, reputation risk, and credit risk. BNPL financing may be more expensive than other financing options, and the process of obtaining it can be complex and time-consuming.

How does Atlendis address Buy Now Pay Later?

Atlendis supports BNPL use cases through intermediary Fintech companies that have access to liquidity pools on the protocol in order to borrow funds from Atlendis lenders and issue BNPL products to their institutional customers. By leveraging blockchain technologies, the Atlendis protocol improves the BNPL industry by increasing transparency, reducing the risk of fraud, improving efficiency, and enhancing security. The blockchain's decentralized, transparent ledger enables users to record and track transactions in a secure and transparent manner, which can help improve the accountability of the industry, but also increase accounting efficiency. The use of smart contracts on the blockchain automates certain aspects of the BNPL process and helps improve efficiency while enhancing the security of BNPL transactions.

Benefits for Lenders to use Atlendis for BNPL

• Steady stream of income: BNPL investments can provide a steady stream of income in the form of interest and fees.

• Attractive yields: BNPL interests are often priced above the risk-yield curve.

• Diversification: Investing in BNPL can help diversify an investment portfolio, as it provides exposure to a different asset class than traditional investments such as stocks and bonds.

• Low default rates: In the short-term debt asset class, BNPL has had low default rates, which can make it an attractive investment for investors seeking a relatively low-risk option.

• Opportunity to support the growth of businesses: Investing in BNPL can also provide an opportunity to support the growth of businesses, particularly small and medium-sized enterprises.

• Potential for reduced risk: The use of blockchain technologies in BNPL can help reduce the risk of fraud and errors, which can be beneficial for lenders.

Benefits for Borrowers to use Atlendis for BNPL

• Flexibility: BNPL financing can provide businesses with the flexibility to make purchases or investments that they may not have been able to afford upfront.

• Accessible source of financing: BNPL can provide businesses with access to alternative financing through digital currencies in a fast and efficient way compared to traditional lending sources.

• Enhanced creditworthiness: By using BNPL products, businesses can enhance their creditworthiness and demonstrate to their buyers and suppliers that they are financially stable and able to fulfill their obligations.

• Improved cash flows: for businesses incurring irregular cash flows or exceptional expenses for instance, BNPL allows the continuity of operations while smoothing out cash flows over a longer period.