Newsletter 07/23

• Digital lender Zopa Bank is set to snap up Buy Now, Pay Later firm DivideBuy for a not disclosed amount. The deal marks the London-based bank’s first acquisition and comes after it raised a £75m warchest in January, which bosses said would be channelled into dealmaking. The two firms are now set to team up to offer credit to customers for bigger purchases between £250 and £30,000. DivideBuy allows merchants to offer their customers interest free payment options at checkout. Shoppers can spread the cost of their purchases over a 2-12-month period with over 400 merchants. Robert Flowers, CEO at DivideBuy said in a statement “we were delighted to be approached by Zopa in its search for a POS finance provider to support its vision of building Britain’s best bank.” http://bit.ly/3xqhYBV

• Hamburg-based fintech startup Flexvelop secures €3 million Seed B funding. Seventure Partners, 4Tree Capital, Innovationsstarter Fonds Hamburg and four business angels jointly invest €3 million in the fast-growing FinTech startup Flexvelop. Via Flexvelop, business customers can flexibly rent individual small devices as well as larger collective orders. In this way, young, small and medium-sized companies in particular can work with professional equipment without detours and later flexibly decide whether and when is the best time to buy or return it. Flexvelop is already represented at dealers for catering equipment, office IT and tools. At partner retailers such as Notebooksbilliger.de, WMF or the consumer electronics store EXPERT, "Flexvelop" is already a recommended payment option for tradespeople. In the future, the fully automated payment solution is to be increasingly integrated into the check-out process of online stores in addition to the retail space. http://bit.ly/3S35cCQ

• White label Buy Now, Pay Later fintech Limepay rebrands as APRIL and sharpens focus on Embedded Finance. The company now provides an embedded finance platform that is configurable to the needs of businesses. Among the features it offers via its platform are payment processing, instalment options, lending solutions, fraud protection and working capital, according to its website. It also provides sub-merchant management for marketplaces, subscriptions, tokenization, fast payout option, eligibility engine and dashboards for both businesses and customers. http://bit.ly/3k0biY6

• International payment provider Ecommpay has recently launched its first Buy Now, Pay Later product exclusively tailored to travel businesses for online bookings. The new payment solution was built using the company’s proprietary technology and promises to deliver 24/7 customer support with a compelling risk scoring system based on an individual’s travel circumstances, offering high credit limits for certain travel needs. At the same time, the BNPL solution allows for credit return limits to protect booking agencies and travel agents, offering a suite of payment products that enable companies to grow their businesses and protect travellers. Travel businesses who adopt ECOMMPAY’s new BNPL solution can expect various reimbursement options, including Pay in Instalments, Pay in 30 Days, or Pay over Time that introduce flexible and manageable financing for larger purchases. http://bit.ly/3YMRKFC

• Apple 's Pay Later service could debut in the next several weeks after testing it with retail employees. According to Bloomberg, the eligibility criteria were revealed during the test. The company will apparently evaluate potential customers based on their past spending with Apple, and even the Apple devices they own. In addition, eligibility could also depend on whether customers had applied for an Apple credit card and the other cards tied to their Apple Pay accounts, the report said. http://bit.ly/3ItyJ5y

• The UK government is consulting on proposed draft legislation that will bring BNPL within the Financial Conduct Authority ’s regulatory perimeter. Whilst a proportionate approach may be evident in the tailoring of pre-contractual information requirements, firms may be disappointed to see that the government is proposing to adopt existing Consumer Credit Act requirements for the content of agreements and the treatment of arrears, default and forbearance. The government’s ‘ambition’ is to lay the final legislation before Parliament during 2023. In acknowledgement of the broad stakeholder support for BNPL to be brought into regulation as soon as possible, the government is proposing a temporary permissions regime to enable firms to transfer into the new regulatory regime before seeking full authorisation, enabling early introduction of conduct requirements. Firms will need to consider whether this gives sufficient time to get to grips with those requirements. http://bit.ly/3YX6pOy

• Payments giant PayPal supports Buy Now, Pay Later regulation in Australia. The company wants Buy Now, Pay Later loans subjected to consumer protection law, it said in a submission to the Australian government, adding a powerful voice from inside the sector calling for regulation. PayPal, which provides BNPL loans alongside its main money transfer service, said it had its own safeguards to protect shoppers from borrowing too much but the industry should face some regulation to ensure "consumer and industry certainty and competitive neutrality". Many other companies which sell BNPL loans said in submissions that they supported minimal or self-regulation. http://bit.ly/3jVTihH

• Klarna reports boom in demand for Buy Now, Pay Later in the home improvements sector. The reported rise in Klarna sales highlights the growing appetite amongst UK consumers for greater flexibility over their payment options when buying more expensive household items. The shopping trend is revealed by Klarna as it announces a raft of new partnerships with leading home improvement retailers Wilkos and Wickes, as well as interiors and home devices brand, SharkNinja. http://bit.ly/3K7QFE5

If you enjoyed this week's edition of the Buy Now, Pay Later Newsletter, feel free to share it with all the other banking, payments, and fintech enthusiasts you know.

This is a wrap of global news coverage on the BNPL industry and does not necessary represent my view. This newsletter is in no shape or form related to my employer. Views expressed are my own.