Which types of financial products are best for BNPL?

November 18, 2021

Banks & Lenders


Financial Services

LendIt Fintech Webinar Series: Which financial products are best for BNPL?

Andrew Rostami, CEO of Citizens Pay, and Yaacov Martin, CEO of Jifiti, shared insights into BNPL in the LendIt Fintech webinar entitled: Laying the Foundations for a successful BNPL Offering.

Want to know which financial products to provide at the point-of-sale? Watch the video above or keep reading…

Yaacov Martin: When we speak about BNPL loan products what would you say are the types of financial products are needed at at the point of sale?

Andrew Rostami: Thanks Yaacov. And first off, great to be here today. I think what we’re seeing at the point of sale is you need a broad offering. Buy Now Pay Later in the past has referred to a very narrow product set – a pay in four, that generally has less underwriting, that’s generally a certain MDR. It’s very straightforward. It tends to be just a checkout option. But what we’re seeing in the market is you really need to have a full set of capabilities as merchants have gotten, rightfully so, much more sophisticated.

And so what that means is you generally need a longer term option. Paying in four paychecks is not going to cut it for a lot of the consumers particularly for what they really need to do to fund their dreams and desires, which is more than just buying a pair of jeans.

So you tend to need longer term, you tend to need different products such as not just 0% interest, but other promotional interest and really competitive APR products, because that can get very expensive for a merchant if you’re doing a true zero for too long. And then, Yaacov, I’d say the other side of the product is just all the other capabilities that you deliver to the merchant integrated marketing, sales support, all these things that drive a truly transformational program versus much more of an incremental kind of checkout widget type of program.

Key Takeaways

  • Lenders and merchants need to provide a broad offering
  • Consumers need both short-term (pay-in-4, split payments) and longer-term financing options (line of credit, installment loan)
  • Need both 0% APR and other competitive APR products
  • Product needs to include other merchant support capabilities e.g. integrated marketing, sales support
  • Transformational program instead of an incremental checkout program