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 79 - The Last Mile: Domestic Connectivity in Ecommerce - Steve Villegas, PPRO
Episode 78 - Identity Verification in Fraud Prevention - Ajay Andrews, Whitepages
Voice Enabling the Digital Credit Union
Episode 76 - Payments Canada - Justin Ferrabee, COO
Episode 75 (Part 2) - Payments, Petro, and the Connected Car - Scott MacKay, First Data
Episode 75 (Part 1) - Fraud and the Merchant - Ajay Guru, First Data
Episode 74 - Payment Authentication and Identity in Context - Steve Wilson, Lockstep Technologies
Episode 73 - Fintech South, Boot Camp, and Biometric Authentication - Andrew Gowasack, TrustStamp
Episode 72 - Alipay's North American Acceptance Plan - Souheil Badran
Episode 71 - The Tech Bringing B2B Fintech to the Mid-tier Bank - Lisa Shields, FI Span
Episode 70 - Real-time Cross-border Payments - Laurence Cooke of nanopay
Episode 69 - PCI Standard Technical and Geographic Evolution - Troy Leach
Episode 68 - Digital Identity, a Mobile App, and a Blockchain - SecureKey
Episode 67 - The Conversational User Interface - Glenbrook’s Russ Jones
Episode 66 - Real Time Payments Comes to the US - Steve Ledford of TCH
Episode 65 - Gates Foundation and Mojaloop - Kosta Peric
Episode 64 - B2B Payments Innovation - Modulr
Episode 63 - Payments Come to the Browser - W3C's Ian Jacobs
Episode 62 - Glenbrook on B2B and Faster Payments @ Money/2020
Episode 61 - Payments Systems in the US - Third Edition - Glenbrook’s Russ Jones
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