Newsletter 10/23

• Open banking platform Yapily and Buy Now, Pay Later player Zilch have agreed a partnership that will provide millions of people with better access to 0% interest swift repayment credit. The partnership marks the first time Yapily has teamed up with a provider of consumer credit via BNPL and will see Zilch leverage Yapily’s innovative open banking platform and expertise to deliver an even more accelerated and superior credit decisioning process, responsibly, at a time when it is most needed in the lending industry. By partnering together, Yapily will enable Zilch to access an individual’s risk and affordability profile more accurately than is currently exercised by traditional assessments. This makes it easier to provide Zilch’s 3 million customers with credit options that are tailored to their specific financial situation. This approach will empower individuals to manage their finances better. http://bit.ly/3J0r3Xw

• French fintech Younited is breaking into the point-of-sale financing business in Spain after rolling it out for a year in the French market. The solution will allow retailers to offer their customers to finance purchases of up to 50,000 euros, in terms of a maximum of seven years (84 months) and leaving it up to the business to decide whether to pass on any costs to the customer or split it up for free. "The first partnership with K-tuin, Apple Premium Reseller and the largest distributor of Apple products in Spain, has already been successfully launched," says the bank's Iberia director for B2B (business-to-business) agreements. Its customers will thus be able to purchase "the full range of Apple products" and accessories through its website and physical stores. http://bit.ly/3ZzGxsL

• Buy Now, Pay Later provider Scalapay has acquired Italian payment institution Cabel IP to boost growth across Europe. The acqusition of Cabel IP gives the company the ability to offer merchants an integrated payments offer alongside its BNPL product. "This license means that merchants can now integrate Scalapay via their payment service provider (PSP)," says Simone Mancini, CEO of Scalapay. "We have a long waiting list of merchants who want to integrate our solutions through their PSP. Many of them are looking for an alternative BNPL solution that has a higher level of awareness and offers more value to merchants." http://bit.ly/3mId7Kn

• Buy Now, Pay Later provider Scalapay sees big shift from banks to BNPL platforms across Europe. Scalapay CEO Simone Mancini told Pymnts in an interview, that for traditional banks there’s a growing awareness that BNPL is a win-win model as they navigate the new terrain of integrating with eCommerce technology and the work that goes into marketing and building an active community and engagement. Moreover, “you need to have commerce in your DNA and understand B2B2C in order to make this work,” he argued, pointing to players in Italy and France that have launched with very limited success so far. The European BNPL provider, which has 3.5 million customers across several countries in southern Europe, is also exploring mergers and acquisitions (M&A) opportunities, tapping into a BNPL consolidation trend. “We’re seeing companies that either have interesting technology stacks or customer base but have not necessarily been viable in the current environment or able to raise funding,” Mancini noted of the many opportunities this creates for their product roadmap and expansion. http://bit.ly/3F94Wgo

• Amercian Buy Now, Pay Later platform Affirm quits Australia. A month after laying off 19% of its workforce, Affirm is quitting the Australian market. As of 28 February 2023, Affirm has made the decision to begin an orderly wind-down of our operations in Australia. Emails are being sent to active loan holders who will see no change to their plans. Australia was once seen as particularly fertile ground for BNPL but Affirm's exit comes weeks after local player Openpay fell into receivership. http://bit.ly/3mLHfnS 

• Weekend Read: The Consumer Financial Protection Bureau has published a new report analyzing the financial profiles of Buy Now, Pay Later borrowers. The report explores the consumer financial profiles of Buy Now, Pay Later borrowers using the Bureau’s Making Ends Meet survey and its association with credit bureau data. While many BNPL borrowers who we observed used the product without any noticeable indications of financial stress, BNPL borrowers were, on average, much more likely to be highly indebted, revolve on their credit cards, have delinquencies in traditional credit products, and use high-interest financial services such as payday, pawn, and overdraft compared to non-BNPL borrowers. BNPL borrowers had higher credit card utilization rates and lower credit scores. However, many differences between BNPL borrowers and non-borrowers pre-date BNPL use. Further, contrary to the widespread misconception, BNPL borrowers generally have access to traditional forms of credit. In fact, they were more likely to borrow using credit and retail cards, personal loans, student debt, and auto loans compared to non-BNPL borrowers. Finally, the report estimates that a majority of BNPL borrowers would face credit card interest rates between 19 and 23 percent annually if they had chosen to make their purchase using a credit card. http://bit.ly/3J9o2Eg

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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.