New-age banking players are crowding the BNPL space

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With the rise in the BNPL market, new-age banks are also approaching this space to compete with the pure BNPL players. Unlike other sectors which raced to enter the BNPL industry, banks took a bit slow. The key factors which obstructed banks from launching BNPL services are technological advancements and regulatory restrictions.

Unlike BNPL players, who have different ways of regulation, banks have to follow responsible lending, check affordability, etc., and then issue loans to the customers. However, the trust consumers have in banks might take an edge against the BNPL players, who are off late facing regulatory issues. This resulted in banks are expanding their reach in the BNPL industry quite rapidly.

In January 2022, Spanish financial service company, Santander, announced the launch of Zinia, its BNPL product, in Germany. This is unique as it is the first time an incumbent bank is entering this space. The product is developed by Santander's Digital Consumer Bank (DCB). Santander, which is already present in almost 18 countries with 19 million customers and 63,000 affiliated merchants, will help Zinia to capture customers through its wide network. The bank launched its BNPL product in Germany since there is a high demand for such products from the retailers.

Similarly, Singapore-based IN Financial Technologies (INFT), which deals in tech, retail banking, and finance, had started to offer BNPL for small- to medium-sized businesses (SMBs) in January 2022. The model with which INFT is operating is a bit different from the traditional BNPL models. INFT is offering its customers interest-free loans spread over six installments to S$5,000 (US$3,720) maximum transaction size.

Unlike many other companies which take cuts from business profits, INFT is not sharing any profit, which is attracting the SMBs to provide BNPL loans to its customers. Most importantly, this will help the businesses to increase the sales volume together with the transaction size.  INFT is following simple steps to make the businesses far more attractive to customers as compared to its competitors. 

• The businesses need to provide a proper invoice to INFT.
• INFT will properly assess the customer and then only verify the buy.
• After receiving the first payment from the customer, the business will receive the full payment from INFT. Apart from the transaction fee, INFT does not deduct any amount.

The BNPL feature of INFT will help the businesses capture a loyal customer base together with the broader reach of the target audience, which will lead to a higher generation of revenue from a medium to long-term perspective.

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