Alibaba Collaborates with Slope for Business-to-Business Buy Now Pay Later Service
In a strategic move to cater to the growing demand for B2B financing in the small business segment, Alibaba has partnered with AI payments company Slope to launch a "Buy Now, Pay Later" (BNPL) option for U.S. business buyers on Alibaba.com. This partnership aims to provide flexible and intelligent financing options at checkout, with real-time credit underwriting powered by Slope's AI.
The partnership is a significant step towards the wider adoption of BNPL in the business space. Alibaba has been focusing on smaller, U.S. businesses, particularly mom-and-pop operations, to drive growth. By addressing their strong demand for flexible B2B financing solutions beyond traditional card payments, the company hopes to help overcome cash flow constraints for these smaller enterprises, thereby supporting small business growth.
Slope's embedded financing solution, dubbed "Pay Later for Business," offers a more flexible approach to payments, potentially expanding market reach for smaller B2B businesses. This strategy supports smoother purchasing experiences and increases confidence for these businesses, enabling them to afford products and make purchases they might otherwise have to pass on.
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 great example of how fintechs are building on the promise of embedded finance.
It's worth noting that since the 2008 financial crisis, banks have shifted their small business lending to card-based products. However, fintechs have demonstrated that many business financing needs can't be met solely through card offerings, creating opportunities for more flexible solutions like BNPL.
Javelin Strategy & Research reported last year that nearly half of all merchants surveyed now obtain their payment accounts from providers other than banks, indicating a shift towards non-traditional financial services providers. Consumer-facing BNPL products offer little value to merchants at the checkout page, but can deliver growth on the product page.
Slope expects to announce additional collaborations later this year, further expanding its reach and offering more businesses the opportunity to benefit from its flexible financing solutions. As the demand for B2B financing in the small business segment remains strong, particularly for solutions that go beyond traditional card payments, partnerships like this one could play a crucial role in supporting the growth and success of small businesses in the U.S.
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