Continuing our payments in finch series, we talk about one of the major changes in the payments industry over the last few years: the installment lending phenomenon. Companies like AfterPay, Klarna, and Affirm (that just IPO'd and saw its stock double in one day) are leaders in this buy now, pay later (BNPL) space and appeal to Millenial and Gen Z users as well as the merchants selling to them.
These firms offer a range of installment payment options: three, six, and 12 month payback periods are typical. The interest rate gets lower the shorter the payback period and, for the shortest period, that cost is eliminated. The merchant pays for it as promotional financing. These installment loan options generally increase the size of the sale and, because the BNPL provider may take on the risk and guarantee the sale, they remove a measure of risk from the merchant. In other words, for multiple merchant categories, they increase sales.
BNPL providers accept multiple methods of payment: credit and debit cards and, of course, they may encourage the use of ACH as a low cost funding source.
For younger demographics, a majority of them without credit cards and credit histories, these services enable them to transact.
Sezzle is a player in this arena with a unique, very short term product that charges no interest to the consumer because the purchase is paid back in six weeks. The costs are born by its merchant customers. Sezzle has particular appeal to sub-prime or young consumers who may not even have a credit score.
Take a listen as Sezzle’s Chris Bixby, VP of Growth, and Glenbrook’s George Peabody dissect the Sezzle proposition and discuss the changing face of Retail in the post-COVID era.
Watch Chris describe why his customers choose the Sezzle payment option:
Episode 60 - Where and Why Interchange Optimization Works - CardConnect
Episode 59 - B2B Payments are Hot - Glenbrook's Erin McCune
Episode 58 - Consumers and Faster Payments - Consumers Union
Episode 57 - The Bumpy Road toward Merchant EMV Adoption - Heartland
Episode 56 - Consumer Healthcare Payments - BillingTree
Episode 55 - 3D Secure and the IoT - CardinalCommerce
Episode 54 - Securing IoT Payments - Gemalto
Episode 53 - India's Payments Innovation Scene - Glenbrook's Allen Weinberg
Episode 52 - Innovation for the Underserved - FinLab
Unravelling the Payments Data Hairball
Episode 50 - Internet identity, privacy, and a blockchain - SecureKey
How to Get, and Stay, Smart in Payments
Episode 48 - APIs, ACH, and Faster Money - Dwolla
Episode 47 - Blockchains and Moving Money on the Internet - Circle Internet Finance
Episode 46 - 3D Secure, Visa, and CardinalCommerce
Episode 45 - False Declines and Ethoca's Role
Episode 44 - On Privacy, IoT, and Security - Online Trust Alliance
EP43: Making Money Fly over Borders - ISO 20022, the IPFA, and Faster International Payments
Payments Data with Russ Jones
Marwan Forzley, Align Commerce, and the Evolution of Blockchain Business
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