The Impulso Podcast E69: The business model behind BuyNowPayLater
Mar 29, 2024
They dig into why BNPL schemes are collapsing in Singapore and what makes the model different from credit cards. Topics include merchant economics and who pays the fees. Listeners hear about customer acquisition hurdles, which product categories suit BNPL, and why platform-linked services outperform standalone apps.
AI Snips
Chapters
Transcript
Episode notes
BNPL Is A Virtual Credit-Card Model
- BNPL is effectively a virtual credit-card style product that splits payments over time at point of sale.
- It relies on merchant fees (MDR) similar to credit cards to fund the convenience offered to consumers.
Users Download BNPL For Discounts, Not Credit
- Co-host described using BNPL apps only for vouchers while paying in full at checkout.
- Zhang An recalled BNPL teams staffing restaurants to get customers to download apps.
High Costs And Short Terms Protect BNPLs
- Independent BNPLs face high customer acquisition and merchant adoption costs plus credit risk.
- They shorten instalments (e.g., three months) to reduce risk and accelerate data collection for credit models.