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Allianz Trade partners with ‘buy now, pay later’ platform

Allianz Trade has struck a partnership with e-commerce platform Two, as the trade credit insurer works to expand its digital offering and grow its footprint in the ‘buy now, pay later’ (BNPL) space.

As part of the agreement, Allianz Trade will insure domestic and international payments between e-merchants onboarded onto Two’s business to business (B2B) platform and their buyer customers.

An application programming interface (API) integrates the underwriter and platform’s internal systems, enabling Allianz Trade to provide instant decisions on credit requests from buyers.

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Following approval of the shopping cart amount and the buyer’s creditworthiness, a BNPL option will appear at the checkout stage and the company will have the option to defer payment terms.

Should they choose to do so, Two will immediately pay the seller, with Allianz Trade then covering the e-commerce platform against the risk of the buyer defaulting on the deferred payment.

“The sellers tend to be larger, but the buyers tend to be smaller,” says Özlem Özüner, commercial director at Allianz Trade UK and Ireland.

“This offering is important for trading SMEs as it allows them to get deferred payment terms online, shop instantly and expand their business with e-commerce merchants,” she tells GTR.

There will be a credit limit of US$100,000 per individual buyer, who – once registered on the Allianz Trade system – will be able to make recurring purchases from a merchant on the Two platform.

Companies will be able to secure payment terms akin to what is offered in the consumer BNPL space, Özüner says.

“If Two wishes to request different payment terms for several different e-merchants, the API accommodates for that. The system has the flexibility to move up to longer terms of 60 days, but based on what we are seeing in the market, we anticipate most payment terms will be around 30 days.”

Allianz Trade (formerly Euler Hermes) has previously provided some insurance to French and North American merchants with an established online presence and BNPL offering.

But the trade credit insurer says the partnership with Two is the first with a major BNPL platform and will help accelerate its activity in the space.

Özüner says there is increasing interest in BNPL financing from companies in retail, food as well as durable goods, electronics, small construction equipment, and “any sector that is suitable for online trade”.

“Buy now, pay later is quite a new concept, and is currently focused on local or domestic business,” says Özlem.

“But we believe it is going to be quickly scaled up and will support international export transactions.”

The post Allianz Trade partners with ‘buy now, pay later’ platform appeared first on Global Trade Review (GTR).

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Published 23 November 2022