Buy Now Pay Later (BNPL) fintech services have been making headlines recently. I have been following the space for a few years now, and it is really starting to take off.
For those not familiar with BNPL fintech services, they are companies that provide short-term credit to customers who cannot or do not want to wait until their paychecks hit their bank accounts. For a monthly fee, they provide a customer with access to goods and services at the point of sale, as well as a credit limit that can be used to purchase from online merchants.
In addition, BNPL fintech services are initiating partnerships with major retailers who also want to offer short-term credit to customers. The BNPL market is growing, and according to The Motley Fool, it reached $6 billion in 2019. It is expected to reach $10 billion by 2022, and eventually become a trillion-dollar market by 2027.
The BNPL edge over POS Financing Methods
BNPL, or Buy Now Pay Later, is an innovative new way to shop. With traditional POS financing, you get charged a high interest rate for up to 60+ days meaning it is unaffordable for many potential customers. BNPL has no interest and is paid back over 6 months, making it affordable and attractive to a broad range of people looking to make the most of new technology without needing to wait weeks to afford it. You can shop with BNPL today and pay later, all the while earning points for your purchase. It is like layaway without any of the negatives – no cost to you up front, same-day shipping (if ordered before 3pm), 14 days free returns & late payment fees are minimized or non-existent.
How can Banks and FinTech’s ride the BNPL trend?
Arttha platform can help banks and financial institutions capitalize on the benefits of BNPL without investing in development. All we have to do is connect it with the existing systems, such as mobile banking apps. Customers get the convenience of instant access to credit, while financial services providers reap the rewards of additional revenue sources.
Financial institutions have a lot to offer the world, but many of them are limited to brick-and-mortar locations. Currently, it is important for financial services providers to embrace new innovative technologies that will drive revenue. BNPL is just one example. There are other innovative solutions that can help increase profits without affecting the customer experience.
Financial institutions have a clean slate to work with when combining BNPL with other innovative products. They can write their own future, so they need to focus on what is in the best interest of their consumers. At the same time, though, financial services providers must ensure that they are properly educated about how these solutions work.
BNPL fintech companies are using the latest technology to create low-cost, effective solutions that have a positive impact on consumers’ lives. Banks can get in on this action by adopting new innovative technologies and services at their locations. It is about creating an overall better experience for everyone involved.
The BNPL sector’s success was due to a variety of reasons. The desire for digital payments and in-store purchases, the attractiveness to investors, immense potential for collaboration, and not yet existing competition between marketplace participants were just a few of them.
There is still opportunity for research in that area, and many consumer groups have yet to be addressed. It is also feasible to target millennials, who may be incentivized with a BNPL as a new payment option, or older people who have never paid their bills online before; or to serve young parents and parents with their own particular demands.
Learn more about Arttha
For more information about using BNPL solution for your financial services business, please contact us! We can provide you with all the latest information on this topic. Our experts are available to answer any questions you may have about Arttha – Unified fintech platform. You can also give our experts a call at +65-67095662 or write to us at firstname.lastname@example.org
- 5 reasons facial recognition tech is good for payments authentication
- Protect your bank against the 4 most common cyberattacks with Smart Onboarding
- Top AI use cases in Lending that Banks must know
- Things Traditional Banks can learn from Neo banks and Fintech companies
- Five misconceptions about cloud in the BFSI sector