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 219 - Smart Takes on Cross-border Payments - Ryan Zagone, Head of Americas, Wise for Banks, and Joanna Wisniecka, Glenbrook
Episode 218 - The Technologies, Policies, and Realities of Cross-border Payments
Episode 217 - Talking Moonshots with Jared Isaacman, Founder and CEO, Shift4
Episode 216 – Fanning the Flames: Payments Post #5
Episode 215 - From the Vault: On Faster Payments in the U.S. (Episode 10)
Episode 214 - We Just Can’t Stop Talking About Tokenization
Episode 213 - From the Vault: Payment Tokenization Continues to Roll (Episode 21)
Episode 212 - Creating Customer Success in the Age of Embedded Finance with Ashley Isenberg, VP Revenue & Strategic Partnerships at Finix
Episode 211 - AI Unleashed: Exploring Fresh Horizons in Payments with Frank Young and Russ Jones
Episode 210 – From the Vault: Bitcoin Discussion with Scott Loftesness (Episode 1)
Episode 209 - Part 2 of What’s Hot, What’s Not, and What We’re Watching: Checking in at 2023’s Halfway Point with Glenbrook
Episode 208 - Fanning the Flames: Glenbrook's Payments Boot Camp Intensive
Episode 207 - Fanning the Flames: Payments Post #4
Episode 206 - What’s Hot, What’s Not, and What We’re Watching: Checking in at 2023’s Halfway Point with Glenbrook
Episode 205 - Why Simple Questions Can Be Hard To Answer, with Klas Bäck, Founder and CEO of Pagos Solutions
Episode 204 - Are We Ready to Pay by Bank? A Conversation with Eric Shoykhet, CEO & Co-Founder of Link Financial Technologies
Episode 203 - What Big Data Revealed About BNPL Consumers with Kristin Carlson and Zach Tondre, LexisNexis Risk Solutions
Episode 202 - Innovating at the Intersection of BNPL and Embedded Commerce with Bobby Tzekin, Founder and CEO of Wisetack
Episode 201 - Fintechs, Banks, and the Companies Joining Them Together – In Conversation with Tarun Gupta, Jump Capital, and Chris Uriarte, Glenbrook Partners
Episode 200 - Fanning the Flames: Payments Post #3
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