- Buy Now, Pay Later (BNPL) Players Affirm, Afterpay and Zip announced new features and investments.
- BNPL’s offerings are extremely popular, but profitability and regulatory challenges remain pervasive.
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Major players buy now, pay later (BNPL) launched new features and one invested in an overseas opportunity.
Affirm introduced Adaptive Checkout to provide consumers with increased payment flexibility.
- The feature shows customers a side-by-side comparison of BNPL options (bi-weekly or monthly payments) for each transaction at checkout, according to a press release.
- Adaptive Checkout increases the chances of customers using Affirm’s BNPL solution by providing increased payment flexibility so customers can choose a plan that matches their needs.
- Fifty-two percent of consumers in Australia, UK and US said convenience and flexibility were the top benefits of BNPL, through Marqueta.
The Money by Afterpay application will allow customers to retroactively convert a payment into installments.
- The imminent launch The lifestyle and money management app includes savings account and physical debit card and helps users manage their BNPL payments.
- The new feature, dubbed Retro, allows users to turn any transaction made within 72 hours using the Money by Afterpay debit card into installments, according to a press release. Depending on their spending limit, customers can convert up to $ 200 in transactions with Retro.
- Retro can make Money by Afterpay a more attractive card product, helping to attract more users to the app and the card. And it gives customers more opportunities to spend with Afterpay, which can increase the volume. The feature also allows Afterpay to upgrade with issuers such as chase away and Monzo, which also offer retroactive BNPL functionality.
Zip has acquired a minority stake of $ 50 million in India-based BNPL start-up ZestMoney.
- The startup offers its more than 11 million users short and long-term installment loans and works with more than 10,000 online merchants in India, including Amazon and Flipkart, according to a press release.
- This strategic investment allows Zip to gain a foothold in the Indian market, a region that we noted was untapped by traditional BNPL players. It also supports Zip’s global expansion strategy and probably opens up new income-generating opportunities in India, which is experiencing robust e-commerce growth.BNPL offerings have become extremely popular, but profitability and regulatory challenges are increasing pronounced as competition intensifies.
Forty-seven percent of US and UK consumers and 60% of Australian consumers have used a BNPL solution, according to Marqeta. But although these solutions have seen a surge in adoption over the past year, profitability remains complicated: the average profit margin in the BNPL industry is -2.6%, according to senior industry analyst IBISWorld Yin Yeoh. And imminent settlements coupled with the recent wave of BNPL entrants could make it difficult for existing players to maintain market share and increase profitability.
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