The “buy now pay later” (BNPL) industry is continuing to boom and is currently the fastest-growing online payments method in the UK. BNPL is a service that allows consumers to shop online and place orders without having to pay the full amount upfront.
But as well as proving popular in the B2C e-commerce sector, BNPL is also taking off in the B2B e-commerce space thanks to providers like Mondu.
What is Mondu?
Founded in 2021, Berlin-based Mondu launched in the UK in March 2023. The payments fintech enables B2B merchants and marketplaces to offer BNPL payment methods to their business customers. The company also operates in Austria and the Netherlands and has also expanded into France, although it is currently only available for buyers.
What does Mondu offer?
Mondu offers a BNPL solution for online checkouts so that businesses can offer their customers an alternative payment method and flexible terms. These services let customers buy goods and services and pay for them later.
In February 2023, Mondu also launched MonduSell, a new solution that offers BNPL across multiple sales channels, including over the phone, onsite, and by email.
Features of Mondu
Some of the key features of Mondu are outlined below:
BNPL solution. Enables businesses to offer customers an alternative payment method and flexible terms, but you, as the merchant, still get paid upfront.
Different payment options. Currently, Mondu offers invoice payment by bank transfer, invoice payment by SEPA direct debit, and instalments.
Flexible terms. Buyers can pay their invoice over 30, 45, 60 or 90 days, or in 3,6 or 12 monthly instalments via Mondu’s instalments plan.
High acceptance rates. Mondu provides real-time approval and a credit check is run in the background. Mondu accepts up to 90% of shoppers at the checkout.
Automated processes. You can track every payment on a centralised dashboard.
Easy to integrate. Quickly integrate Mondu into your checkout – it integrates in any webshop and supports a range of multi-language systems and payment methods. You’ll also have a dedicated integration manager to help.
E-commerce plugins. Embed the Mondu widget into your webshop checkout.
How does Mondu work?
By integrating Mondu into your online checkout, your business customers will be able to buy the goods and services they need and then opt to pay for them at a later date. You, as the merchant, get paid promptly after an order has been placed, protecting you against the risk of default. Mondu also reduces the operational tasks associated with payment allocation and in the event of a missed payment deadline, Mondu will take care of chasing and collecting payments on your behalf.
Merchants can integrate various BNPL payment methods into their checkout. Buyers can choose to pay their invoice in 30, 45, 60 or 90 days or can opt for 3, 6, or 12 monthly instalments via Mondu’s instalments plan.
Mondu’s payment methods currently include purchase on account by bank transfer, purchase on account by SEPA direct debit, and purchase by instalments.
According to Mondu, merchants that offer flexible payment terms can gain a competitive advantage while increasing their conversion rate, average order values and sales.
How much does Mondu cost?
Exact costs are currently unclear but Mondu says its partner bank will send you the invoice payment, minus the billing amount and the VAT due. You will also receive a payout report from Mondu that will explain what has been purchased, along with what fee has been applied and what sales tax has been incurred.
Pros and cons of Mondu
Pros
Enables you to maximise conversions and improve cash flow
You are protected against the risk of default, with Mondu chasing payments
Range of payment options for customers to choose from
Easy to set up and integrate
Cons
Payment structure for merchants is unclear
BNPL is not currently a regulated industry
Who is eligible for Mondu?
Mondu supports all types of businesses, including sole proprietors and limited liability companies to freelancers and public institutions.
If you want to sign up, due to the Money Laundering Act, Mondu’s partner bank is required to perform various identification and verification steps through the Know Your Customer (KYC) process. In addition to data and documents relating to your company, you will also need to provide proof of address and identification for the authorised representative and beneficial owners of the business.
Our verdict
With figures from Statista showing that 83% of UK businesses have a website, giving business customers the flexibility to purchase and pay when they want is set to become increasingly important. What’s more, by offering customers a BNPL solution, businesses are likely to see higher conversion rates and will grow quicker as a result. For these reasons, if you’re looking to expand your business and give your customers more choice when it comes to paying for goods and services, Mondu could be a good place to start.
Frequently asked questions
In January 2023, Mondu added $13 million to its initial $43 million Series A funding round, bringing the total to $56 million. Since its founding, Mondu has secured a total of $90 million in equity and debt funding.
No, Mondu is not currently regulated as the BNPL industry as a whole is not regulated. However, the UK government is working towards bringing in regulation to protect BNPL consumers.
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To make sure you get accurate and helpful information, this guide has been edited by Liz Edwards as part of our fact-checking process.
Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time. See full bio
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