The share market may have fallen out of love with buy now, pay later, but BizPay CEO David Price says that won’t deter him from pursuing an ASX listing this year, given rates of growth providing short-term instalment loans to SMEs.
Extended payment terms provide a cash management tool for SMEs, and sending out an invoice with a “Pay by BizPay” button - allowing an invoice to be paid over four fortnights, or four months - could also convince business customers to buy larger amounts of goods and services, Mr Price said.“The reason BNPL increases conversion rates is that instalments are interpreted by the brain as a discount,” he said.
The average invoice amount is $12,300 and the typical customer makes five transactions a month. This delivers much higher revenue per user than retail BNPL; an average SME can bring in $30,000 in annual revenue. That level of funding would require between $100 million to $200 million in equity, which would be needed to secure funding warehouses provided by large banks.“There is huge demand out there,” Mr Price said. “We need access to capital both on the equity and the debt side, and we will need substantial equity capital – hence the plan to get to the public markets.
Like its consumer cousin, B2B BNPL operates at the intersection of payments and credit at the point-of-sale, but it is seen more as a payment service allowing it to avoid credit regulation.and Butn; bigger private operators like Octet and Scottish Pacific; and several other start-ups offering instalments such as Marketlend, Cloudfloat and Grapple.
France Dernières Nouvelles, France Actualités
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