Klarna reports a SEK260 million profit in Q3 and strikes some partnerships ahead of holiday season #Klarna, the AI-driven global #payments network and shopping assistant, has reported a net profit of SEK 216 million for Q3 2024, marking its second consecutive profitable quarter. Under the leadership of CEO Sebastian Siemiatkowski, Klarna has returned to a phase of profit and growth, bolstered by strategic partnerships and rapid adoption of next-generation digital banking products. This momentum sets the stage for a strong holiday season, as Klarna continues to enhance its footprint in the global payments market. Strategic partnerships with key players like Worldpay, Adyen, Apple Pay, and Google Pay are expanding Klarna's reach to hundreds of thousands of new merchant checkouts and in-store terminals worldwide. Recent launches with brands such as Zoom and Lenovo further emphasize Klarna's role as a unified global payments partner, helping merchants increase average order values, conversion rates, and overall sales. The company is positioned to capture a significant share of the $450 billion payments market opportunity through its growing global network. Klarna's innovative digital banking products, such as Klarna Balance and Klarna Cashback, have quickly gained traction, with 1.6 million users in just three months and nearly $5 million returned to customers through rewards. These features enhance customer engagement but also support merchant sales growth, contributing to a 16% increase in gross merchandise volume (GMV) and a 23% revenue boost for the first nine months of 2024. The U.S. market remains a strong growth driver, with revenue up 33%, supported by partnerships with brands like Fashion Nova, Expedia, and Uber. The announce on Klarna website in the first comment.
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Klarna Customers Can ‘Save Now, Pay Later’ With New Balance and Cashback Features Sebastian Siemiatkowski, Co-founder and CEO of Klarna says: “Klarna owes everything to our loyal network of millions of consumers. These new products make it easier for customers to manage multiple scheduled payments, helping our customers use Klarna for more frequent purchases and driving loyalty. We are already one of the most trusted brands in financial services and we want to build on that to support all consumers with their everyday spending. Today's launches are a major step forward, allowing consumers to earn money while they shop and manage it in a Klarna account." https://lnkd.in/dC25wfwP Daniel Greaves David Fock Arvind Varadhan David Sandstrom Camilla Giesecke David Sykes Pedro Camargo Kevin Lindemann #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews
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Merchants Continue to Choose Klarna, with 100,000 New Retailers Joining Klarna’s Network in One Year “The goal is to make Klarna ubiquitous, with Klarna in every checkout so we can provide consumers everywhere with a more flexible and fair payment option. This growth reflects the trust both merchants and consumers continue to place in us to deliver seamless, flexible payment options,” said David Sykes, Chief Commercial Officer of Klarna.“ I can only call this a win-win: the more merchants we have on board, the more accessible our services are to customers, and the more customers using our services, the more beneficial it is for merchants.“ https://lnkd.in/eW5wJ3a9 Daniel Greaves Camilla Sanders David Sandstrom David Fock Niclas Neglen Sebastian Siemiatkowski Elias Nilsson #fintech #finance #banking #paytech #payments #fintechnews #paymentsnews
Merchants Continue to Choose Klarna, with 100,000 New Retailers Joining Klarna’s Network in One Year
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After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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It's incredible how BNPL has evolved from a niche to a $316 billion global industry (WorldPay, 2023), transforming fintech and e-commerce offerings. Though BNPL still trails behind in market share, virtual cards could offer broader merchant acceptance and solve its key limitations. As BNPL continues to evolve and integrate data and AI, the future of payments will be significantly reshaped.
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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Insightful. It will clarify your understanding on credit card vs BNPL
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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Cr cards have evolved a long period of time . BNPL is likely to go through a lot of innovations and get deeply embedded in the business process and systems . Integration with business solutions and other applications will be a cutting edge for BNPL As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity.
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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BNPL is a game-changer in the world of embedded finance, empowering businesses to offer seamless, flexible payment solutions directly within platforms. This approach not only enhances the customer experience but also drives higher conversion rate and business growth. As BNPL continues to evolve, it’s becoming an essential tool for financial inclusion and acccesibility.. Something new is coming…Renmoney. #BNPL #EmbeddedFinance #Fintech #payments #Innovation #Renmoney
After re-shaping both #fintech and #ecommerce, can Buy-Now-Pay-Later now challenge card payments? Let’s take a look. #BNPL owes its success to its double appeal to consumers and merchants. For consumers it’s convenience through a streamlined, low-friction, integrated check-out experience, whereas for merchants it's boosting conversion rates and average order value. As a result, what started as a niche offering is now a multibillion industry worth globally about $US316 billion only on the e-com side (2023 figures, source: WorldPay). But can BNPL really challenge credit cards? Let’s start from the basics: both credit cards and BNPL are unsecured consumer credit, however there is a big difference in terms of risk underwriting: whereas the risk assessment for credit cards takes place ahead of the purchase and is based on hard, income-sided facts, BNPL manages credit risk by accessing alternative #data sources in real-time that enable instant approve/decline decisioning. Depending on market dynamics BNPL can be card-based or not, which can be a significant adoption driver for consumers with no access to credit cards, like young generations (the model’s most active customers). Despite its fast ascend, BNPL accounts today (source: WorldPay) for only 5% of the global e-commerce #payments market compared with 15% for credit cards and 8% for debit cards. On the POS side the numbers are even less favourable with BNPL at 1% vs 22% for credit cards and 18% for debit cards. However, seen from a future perspective BNPL is best positioned to benefit from the declining use of cash globally: it is expected to grow significantly both on e-com and POS. In markets like the Nordics it has already reached double-digit e-commerce market share figures (in Sweden, Klarna’s home market, BNPL has a 25% market share). BUT BNPL has 2 main disadvantages vs credit cards: 1. Its inability to offer credit-card like rewards like return points, miles or cash backs. 2. Relative (vs credit cards) limited acceptance on the merchant side Nonetheless, there is a creative work-around to these issues: virtual cards. The trick is the following: virtual cards tied to BNPL offerings, which can act (and be accepted) as normal credit cards. Benefits: - Work across merchants - Lose the acceptance problem (BNPL acceptance becomes credit card acceptance) - No difference to the typical BNPL benefits for both consumers (i.e. partial payments) and merchants (advance payment in full) - Additional flexibility for consumers As the market evolves, BNPL will be transforming itself to adjust, primarily across 3 main directions: 1) moving away from pure Pay Later plays and into more holistic payment strategies 2) fully integrated experiences, embedded across verticals using big data and AI for hyper-personalization 3) focus on the POS financing opportunity. Opinions: my own, Graphic sources: EY & Prove, Medici
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Fintech expert | Manager | Investor | Advisor
3wWant to stay up to date with the market? Here my newsletter and my podcast: Linkedin: https://tinyurl.com/fintech-weekly Substack: https://michelemattei.substack.com/ Youtube: https://www.youtube.com/@buildersinfintech Spotify: https://open.spotify.com/show/6L6L7uj3IIYEHbBStLXi8M?si=fa10d8cefe2741aa ApplePodcast: https://podcasts.apple.com/it/podcast/builders/id1767562838?l=en-GB