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4 BNPL Companies to keep an eye on from the European region

By Joy Dumasia

October 20, 2021

  • BNPL
  • Butter
  • Europe

Buy Now Pay Later is an interest-free payment service that allows a consumer to delay payment of a good or service or pay by instalments over a while. Referred to as the point of sale instalment loans. BNPL arrangements are an increasingly popular payment option when shopping online. Usually, BNPL arrangements don’t charge interest or fees but have a fixed repayment schedule. 

Millennials are the most likely to use BNPL; they are also underbanked, meaning they prefer alternative payments relying on credit cards or traditional banking. Many Millennials have delayed purchases like houses and cars, carry more debt than other generations, and distrust banks and credit card companies. These financial characteristics have led Millennials and other underbanked populations to choose BNPL payments.

In the developed markets, BNPL grew because the new generation did not want a credit card with layers of hidden fees from traditional financial institutions. BNPL presents itself as the next frontier of consumer credit, challenging credit card payments. Buy Now Pay Later is revolutionising how customers make purchases online and in-store by making payments more flexible and convenient for shoppers. 

The following are 4 BNPL Companies to keep an eye on from the European region:

Scalapay is an innovative payment method that allows you to buy now and pay it in three convenient instalments of the same amount, without interest. This increases the likelihood that the customer will buy immediately and order more items, increasing the conversion rate and average cart amount. Scalapay has the advantage of attracting customers who would not have bought immediately, resulting in more sales from existing customers and attracting new ones.

IBS Intelligence reported that Scalapay announced that it had raised €40 million in a seed funding round led by Fasanara Capital, including Baleen Capital and Italian Family Office Ithaca Investments. Scalapay helps customers buy now and pay later (BNPL) without interest, thus helping merchants scale their businesses and acquire new customers.

Klarna was founded in 2005 in Stockholm, Sweden, to make it easier for people to shop online. In the last 15 years, technology has evolved, excited and transformed the world. Klarna is the leading global payments and shopping service, providing smarter and more flexible shopping and purchase experiences to 90 million active consumers across more than 250,000 merchants in 17 countries.

Recently, IBS Intelligence reported that Klarna, the leading global banking, payments and shopping service, launched its latest OOH UK campaign, Old Credit Is History. The campaign highlights the antiquated credit model that many consumers are still using and show how services like Klarna bring credit into the modern age to the benefit of consumers.

IBS Intelligence recently reported that Zilch, the London-based FinTech scaleup, announced the acquisition of NepFin, a technology-enabled direct lender offering flexible capital solutions. Zilch is on a mission to become the best way to pay overtime anywhere. Zilch offers zero interest, zero hidden fees and zero surprises.

The acquisition follows Zilch’s recent Series B extension, which raised an additional $110 mn, bringing its total funding to more than $200 mn, which will help secure key licensing and regulatory capabilities and expand its ground team in the U.S.

Albert Periu joins as CEO of the U.S., and Thomas Meister joins as COO & General Counsel in the U.S. Stemming from their experience at NepFin and Funding Circle, Periu and Meister bring tremendous industry knowledge in building out U.S. FinTech lending businesses.

Recently, IBS Intelligence reported that London-based FinTech platform Butter had closed a £15.8 million funding round to accelerate the rollout of its responsible open-banking based BNPL shopping app. The round was led by BCI Finance, the credit arm of London based venture builder Blenheim Chalcot, and several other private Angel investors.

A ‘layaway for getaways’. Butter is a BNPL travel agency, providing a flexible, cost-effective way to book travel, with full payment not due until after the trip. It has also launched a BNPL shopping app alongside its travel offering, enabling customers to spread the cost of any purchase from any online store.

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