Forget credit cards, consumers and especially the Gen Z savvy mobile ones, are turning to the BNPL market to finance their online purchases. Welcome to the new world of Buy Now Pay Later (BNPL).
Cybertonica attended the Buy Now Pay Later Europe Conference 2021 last week and here were some of our discoveries.
Flexible payment options have exploded in popularity and are driving out traditional methods of finance. The #BNPL credit and lending model was first established in Brazil. It now accounts for over 54 percent of their sales.
It has hit Europe and hooked #merchants, #banks and consumers alike. The FCA reported in December 2020, around 11 percent of consumers had used a BNPL product since the start of the pandemic. Looking at top players such as Klarna, PayPal, Quadpay there is a huge contest for a global BNPL footprint and the Neobanks like Revolut or Monzo as well as traditional banks who are entering the fray. But how well is the credit secured? What about organised #fraud, who find BNPL is easy pickings?
The BNPL market is lucrative in the #payment ecosystem. Serving as an attractive credit option for consumers, especially without traditional credit histories or thin profiles and a facilitator for merchants trying to optimise their orders and increase sales. Merchants have quickly deployed BNPL providers on their #eCommerce sites and enhanced their smooth and frictionless user experience for customers.
While simple, flexible payment options for consumers enables merchants to sell more. It is important to find the right balance between seamless and accessible lending and responsibility. Greater controls need to be in place for when consumers apply for loans. Otherwise, an open door invites fraudsters and consumers with low chances of repayment, eating the merchant’s bottom line.
BNPL is here to stay. However, with the sensitive data and high financial volumes processed, more aspects need to be regulated to assess affordability risks. As well as serve alongside friendly user experiences. Real-time checks must be integrated with customer onboarding procedures and fraud and #risk management technology can facilitate this.
Open banking also has a clear role to play and international players providing account data in secure environments are sure winners. This includes ID verification, Know Your Customer (#KYC), Anti-money laundering (AML) and credit history checks.
And that’s where we come in to reduce merchant’s risks. Locking fraud out yet locking profits in. Some eCommerce merchants are making commercial compromises by bypassing customer onboarding and #compliance checks.
But choosing Cybertonica means higher accuracy in fraud detection and passive customer biometrics. This helps screen out organised fraudulent applicants and make better risk decisions. Minimising the risk for your business and while ensuring proper affordability checks for the consumer keen on easy credit.
BNPL is a great area to look at for enhancing your conversion and revenue while automatically eliminating a huge share of the risk, using a real 360° fraud and risk solution.
Get in touch with us via hello@cybertonica.com
