Operating a retail finance company or an issuing bank and still confused about whether to offer BNPL as a product feature?
PayPal CEO Dan Schulman said that BNPL usage has soared through the roof. What are the implications for banks and Fincos offering plain old credit cards? The writing is on the wall as customers prefer a fixed and predictable fee rather than a variable interest payment and resulting penalties.
Merchants like the fact that they can selectively offer BNPL offers on SKUs that they want to push. This ability does not currently exist with the “old” credit card model as the merchant’s billing system is not fully integrated with the payment rails. Acquiring banks cannot really get SKU level information at the moment. Hence the new found love for BNPL fintechs!
Also, when you combine the phenomenal adoption of BNPL and subscription payments, the implications are possibly two-fold:
1) BNPL Fintechs are going to see a meteoric rise and then end up being acquired by banks or payment services or become banks themselves.
2) Merchants will be forced to offer many goods on a “everything as a service” basis, paid monthly on BNPL mode.
Agree / disagree ?
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