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Buy Now Pay Later – Paving the Way for Financial Recovery Across Multiple Industries

Buy Now Pay Later (BNPL) has grown tremendously since the start of 2020. As a result of the pandemic, many industries have adopted BNPL as a way of enabling consumers to spend comfortably and at will in financially uncertain times. Though it must be used with caution and rationale, or consumers will find themselves having to cut back on essentials in order to pay back what they owe, BNPL does have its benefits.

Prior to the breakout of the pandemic, 21% of users had missed BNPL payments, with one in five people saying they had to cut back on essentials, including meals, to make payments on time. This figure only increased as more and more people lost their jobs and income. However, when used responsibly, BNPL has enabled a revival for suffering industries as consumers feel able to pay for services and items they would not have felt comfortable paying for otherwise.

When one first thinks of BNPL, it is likely they think of a retail setting, as companies like ASOS have been able to use services from the likes of Klarna, which has seen a higher buying rate than companies that do not offer the option – SimilarWeb found that those who did offer Klarna or Afterpay had an average conversion rate of 5% vs 2.4% for those websites that did not.

Travel industry

The travel industry was one of the worst hit in 2020. Countries closing the borders to tourists meant airlines suffered, with US passenger airlines incurring $5.5billion in pre-tax losses in Q1 2021, amassing huge debts to avoid bankruptcy. Airlines did not suffer alone though – companies relying on tourists for income suffered immensely. In the UK, there were 96% less visits from abroad in Q2 2020; the UK was not alone in this drop in visitors as airline departures from the US fell by 71.5%, affecting not online the airlines, but those that relied on their fliers.

As restrictions have been lifted, the travel industry has been able to capitalise on people’s desires to go on holiday using Buy Now Pay Later. Uplift, the Buy Now Pay Later platform has been key in enabling the revival of the travel industry. Southwest Airlines were the latest major airline to partner with Uplift, as they joined 15 other airline partners in April, including Aeromexico, Air Canada, Alaska Airlines, Azul Brazilian Airlines, Frontier Airlines and Porter Airlines. Uplift already had an existing partnership with Southwest Vacations and is now expanding that relationship through existing payment rails already in place with Universal Air Travel Plan (UATP); which is a payment solution owned by the world’s leading airlines of which Southwest is a shareholder and Issuer. Uplift’s exclusive partnership with UATP enables fast, secure, and cost-effective payment settlement for airlines, offering BNPL options for Southwest flights.

“Southwest Customers are eager to fly again, and our expanding partnership with Uplift will help open up the possibilities of affordable travel to even more people, just in time for the summer vacation season and beyond,” said Jonathan Clarkson, Managing Director of Loyalty, Partnerships, and Products for Southwest Airlines. “Customer loyalty is extremely important to Southwest Airlines, making Uplift a great partner to help support our business objectives.”

Uplift is not the only BNPL company aiding the travel industry’s revival. Fly Now Pay Later is another company that offers finance (from as little as 0% APR) to holidaymakers, who can make repayments in affordable scheduled instalments. Its merchant partnerships range from SME travel operators to leading operators like Malaysian and TravelUp.

Driven by the success of its direct-to-consumer app, checkout integrated solution and the rapidly expanding Buy Now Pay Later sector, Fly Now Pay Later are aiming to create over $1billion of enterprise value in the next 18 months. The company’s CEO, Jasper Dykes, said “The last 12 months have been an unprecedented period for the commercial travel sector with the worst slow down ever recorded in history. While we’re not out of the woods, there are glimmers of hope. After more than a year of being in our homes, people are itching to dust off their suitcases globally. The recovery of travel is likely to be gradual, but when it happens, we hope that by giving people the freedom to book a trip and pay at a pace that works for them, will help spur reservations.

“There are tens of thousands of people who have families around the world who need a frictionless way to finance their flights. By removing financial boundaries, we hope to open the post-covid-19 world for travellers and reconnect people with their friends and families around the globe.

“Since launch, we have been on a mission to make travel more accessible and affordable for more people, by providing payment flexibility at the click of a button. Our proprietary platform has been designed to make instantaneous credit decisions – providing highly tailored and digestible payment options to consumers traditionally underserved by existing credit institutions.”

Health Industry

The health industry has been severely impacted by Covid-19. Due to the nature of the virus many people have not been able to get the treatments they have needed as doctors (globally, not just in the US) have had to help patients suffering from Covid. As the impact of the pandemic becomes more manageable, doctors have been able to see patients regarding other issues.

All healthcare in the US is private, meaning those needing it must pay out of pocket or through insurance. This creates an issue for many patients as for many, paying in one bulk sum is not a viable option. One company tackling this $400billion issue is Jasper. Jasper are a start-up, building a product for private practices to use that offers patients at point of care payment solutions, including buy now pay later, but also creates an accessible and easy checkout experience for patients.

Jasper’s most appealing feature comes in the form of its payment plans. Care Now Pay Later is a payment plan formulated by the Jasper team and the private office, which enables patients to pay at 0% interest rate for procedures under $500. Care Now Pay Later does not have to worry about HIPPA as Jasper do not ask what the specific medical/dental procedure. Simply being aware that it is being used for a procedure in a healthcare setting allows Jasper to not worry about HIPPA. They are still HIPPA compliant as well as all of their technology in case anything of the sort comes up as a concern. For bigger and more expensive procedures, Jasper have created a platform using a waterfall model, meaning that patients are provided with over 20 different lenders providing reasonable loan rates after filling out a form. A person can have a credit rating of 560 and still be eligible to get in touch with the lenders, and compared to putting the payment on their credit card, users are given a much better rate through the Jasper app.

When speaking to The Fintech Times, Muriel Chen, Jasper’s CEO discussed how customers were delighted with the app, as it had enabled them to receive a loan at a reasonable rate of 9.5%, and meant they did not need to open a new medical credit card, which would lead to a mid to high APR interest if the monthly fee could not be paid back.

Chen went on to discuss how Jasper have entered dentistry: “One of the great applications of buy now, pay later is being able to use the service for things like teeth cleaning. Teeth cleaning is a great way for offices to see what higher cost procedures patients may need. Being able to pay for the cleaning in smaller sums with 0% interest means patients are not left paying huge amounts in interest for the smaller procedures, alongside the bigger ones.”

BNPL Abroad

BNPLs most common use in the UK and the US is in retail, with consumers trying out items before buying them, treating their homes as their own changing rooms. Companies like Klarna have boomed – in its latest funding round, Klarna amassed $639 million. The round was led by SoftBank’s Vision Fund 2, with additional participation from existing investors Adit Ventures, Honeycomb Asset Management and WestCap Group, to support international expansion and further capture global retail growth.

Klarna has not been the only company to jump on the BNPL hype train, as globally, various companies have tailored their products to geographical locations. In MEA, Spotii have become the first Shop Now Pay Later in the region bringing the same deferred payment scheme offline and in the store exclusive to their merchants. In MEA, customers have been found to enjoy both shopping online and in-store, so Spotii have created a service that tailors to both. Spotii’s service enables the customer to pay for 25% of the purchase costs and take the goods in-store, then they make another 25% payment either every other week or every month, with no hidden costs, fees, or charges. If the store isn’t on Spotii they can get in touch with Spotii and join its network.

CEO of Spotii, Anuscha Iqbal said, “In this region, cash has always been king, but we saw that changing, and the pandemic has fast-tracked everyone’s increasing use, and reliance on, card and online payments. Building on this, we want to simplify online purchases.”

In South America, dLocal have created a BNPL service for Brazilians to capitalise on the 54% of those surveyed that said they bought eCommerce using a payment plan. This was done through a partnership with Dinie.

Rodrigo Sanchez Prandi, VP Product at dLocal, said: “At dLocal, we are innovators at heart and our goal is to bridge the payments innovation gap between developed countries and emerging economies and Dinie shares that ambition with us.

“Dinie is complementing dLocal’s hyper-local Brazilian payments solutions with capital accessibility to SMEs to pay for higher-value business purchases and invest in their growth via improved technology and digital marketing. We enable global merchants to unlock new revenues and get paid upfront, frictionless and risk-free.”


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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