Bank or platform? BNPL credit collaboration strategy for suppliers

Credit-based transactions have surged sharply in recent years. As an innovative payment solution, “buy now, pay later” (BNPL) offers consumers considerable payment flexibility and presents new opportunities and challenges for suppliers and online platforms. Based on this context, we develop a game-theoretical dual-channel supply chain model that includes the supplier direct sales channel and platform channel. We analyze the supplier’s strategy choices of BNPL credit collaboration under different commission rates offered by the bank and the online platform, and explore the corresponding impacts on pricing decisions for both the platform and the supplier. The results reveal that the retail price in the platform channel is always higher than that in the supplier direct sales channel. Owing to competition in the credit market, the supplier choosing to offer the BNPL credit service will lower the pricing for both the platform and the supplier. Furthermore, the platform’s demand is greater than the supplier’s demand. The supplier offering the BNPL service augments platform sales, with the most pronounced effect observed when cooperating with the bank. Interestingly, regardless of the agency or reselling model, the supplier chooses to cooperate with the online platform when the platform BNPL commission rate is low. Even if the commission rates are high, choosing not to offer BNPL services is never optimal for the supplier in the reselling model. Finally, in the reselling model, when the supplier offers BNPL services, consumer surplus and social welfare increase. However, in the agency model, these outcomes are influenced by the hassle cost.