Collaborations to have prime importance to increase the capacity of BNPL sector

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An uptick is witnessed in the adoption of credit offerings by consumers to allow them to pay in instalments. Key players in the payments industry are entering in buy now pay later (BNPL) space trying to optimize available opportunities in the market. Currently, market players are launching programs which will transform into BNPL offerings.

A global payment provider ‘VISA’ introduced instalment partner portal called as VISA Ready for BNPL allowing enablers to come up with their own capabilities and help fintech firms to extend their credit lines to 'open loop' acceptance by merchants. When a tech platform is looking for a bank sponsored, processor or financial institution who are also trying for a tech stack. As a result, VISA is collaborating with several platforms to provide greater opportunities in BNPL sector.

Few markable events witnessed by the sector mentioned below

• In May’22, Provenir, a global AI-powered risk decisioning software for fintech firms entered into a collaboration with VISA for its VISA Ready BNPL program. This collaboration will enable lenders to offer BNPL services backed up by ability to make AI-powered intelligent decisions. On the back of VISA's new partner program ‘VISA Ready’ for BNPL helping in implementation and growth of VISA's BNPL offering by enabling the fintech firms to select issuers and easily integrate VISA's solutions into their platforms.
  • Notably, this program will allow tech companies to have their own BNPL solution and reach out to VISA's network of clients. It will help to boost their visibility.
  • Data analytics helps BNPL providers in order to use data from merchants' platforms and websites, helping in creating scores of customers based on their online behaviour.
  • VISA is entering in partnerships with AI platforms. Interestingly, AI/ML can be easily used to analyse the links that a customer clicks together with the previous purchases made at the merchants' stores. BNPL providers can also develop their own risk models, to create further value by using customer data. In addition to this, these data-fuelled insights will enable automation to identify risky transaction prospects, thereby protecting merchants, lenders and consumers from fraud. Provenir's AI-Powered decisioning platform is comprised of three components that will help the financial company to overcome the following main challenges i.e., Data integration, AI deployment and decisioning automation. This platform will provide a risk analytics ecosystem take smarter decisions across the entire customer lifecycle for BNPL providers. Apart from the AI platforms, global payments provider entered in partnership with other loan management and loan technology platforms for its VISA Ready under the BNPL regime.
• In May’22, VISA entered in a partnership with the Peach Finance, a lending technology platform that helps lenders build, launch and scale new lending products for BNPL regime. Notably, this partnership will help BNPL providers to integrate suite of servicing tools & compliance guard and proprietary compliance monitoring system of the platform. This will help the BNPL providers to achieve full configurability at launch as well as at scale. This will boost easy adaptation in evolving technologies, regulations, markets, and customer preferences.

Similarly, VISA teamed up with Canopy, a loan management and servicing platform for the same regime. Under this partnership, Canopy will provide BNPL instalments on cards globally. Notably, VISA's portfolio of BNPL solutions comprises VISA Instalments Solution (VIS), standalone credentials together with rails to support efficient B2B settlement. Therefore, lenders and merchants leveraging these solutions can broaden acceptance, increase conversions, and streamline merchant settlement. Under Canopy’s real-time platform, lenders and card program managers can easily track balances and transactions for each borrower and also for all the products used by that borrower. Thus, it will enable the lenders to safely offer BNPL financing through any merchant. Moreover, the platform's BNPL Merchant Toolkit is helpful in analysing, servicing, and tracking BNPL portfolios.

According to PayNXT360, active userbase of BNPL products has recorded strong growth in recent quarters. This industry is exhibiting an astounding growth rate to reach US$2.2 trillion by the end of 2028. Therefore, PayNXT360 underscores the appeal of the deferred payment space to bring more partnerships that are essential to closing capability gaps in the instalment space which is emerging as a new frontier in cross-border commerce.

To know more and gain deeper understanding of the global BNPL market, click here.