It is very easy for many who are new to the fintech space to think that financial technology is an exclusive term for payments technology, and while there is some truth to this, it does not tell the entire story about fintech. However, in June, The Fintech Times is looking to indulge this belief as we look to discuss hot topics surrounding both sending and receiving payments, like buy now, pay later (BNPL), early paydays and much more.
We round out our BNPL and paytech focus as a whole, by focusing on the future of the payment method. In the last few years, it has seen exponential growth, but can BNPL providers sustain this going forward? We reached out to the industry to get their views on what the future of the alternative payment method looks like
Banks stepping up
Kicking off the discussion is Teodor Blidarus, CEO/ co-founder at FintechOS, the digital banking and insurance platform, who believes traditional providers have a part to play.
He says: “While leading players in the BNPL space spread their wings and expand into offering new services in new markets, the future of the sector lies with traditional financial services providers, which have the opportunity to blueprint the success laid out by these leading players.
“By leveraging their existing customer base, which is generally older generations who are open to BNPL, and using their vast marketing and financial resources, these institutions can compete in the space. This would not be a risky move for banks to make, as research from Capco shows that 45 per cent of BNPL users surveyed would like to see the option offered by their bank.
“These institutions have already achieved the necessary step of building up trust among customers as a lender, and by partnering with fintech companies, the technology required for banks to launch embedded finance options can be easily rolled out.”
Staking a claim
On the need to move fast in the industry, Josh Guthrie, UK country manager, Mollie, comments: “It’s unlikely we’ll see the BNPL boom slow down in the near future, but at some point, the BNPL market will be highly saturated with so many players in this space.
“As the market grows, particularly following the pandemic-push from brick and mortar to online, winning and unlocking market share has never been more important and only a handful of BNPL providers will thrive.
“There are perhaps only limited years ahead of us of a furious land grab before consumers choose their primary providers. BNPL providers need to move fast to stake their claim, before someone else does”.
Consumers want choice
Gaurav Sethi, head of Citizens Pay: strategy, product & platform at Citizens Bank, said: “I don’t see the BNPL boom slowing anytime soon. In fact, I believe more consumers will be attracted to more budget-friendly payment options as inflation and other economic challenges continue to push them to be more careful with their spending.
“As for the future of the sector, I believe that more banks will join the space as retailers look for custom-built solutions and regulation continues to be top-of-mind.
“Additionally, consumers will start to see BNPL as an option more and more in their everyday lives, even when making purchases at doctors’ offices or for home improvement projects. Ultimately, point-of-sale credit is on track to be a common alternative and supplement to traditional debit and credit purchases.”
BNPL as the norm
Finally, we hear from Jay Myers, co-founder of e-commerce checkout provider Bold Commerce, who expects to see more BNPL providers.
He says: “In California, 91 per cent of all consumer loans issued in 2020 for personal, family, or household purposes, were buy now, pay later loans. Over the past two years the checkout option has only grown in popularity, and will soon become as commonplace as credit cards.
“We will likely begin to see an expansion of BNPL players in financial service spaces such as reward programs, loans, and crypto payments. However, it is unknown how regulators will impact the sector as the risk of consumers overextending and falling behind on payments grows.”