Here’s how you build a successful Buy Now Pay Later platform: study
Hiring the right talent and developing a good tech stack are key to success.
Getting the right specialised talent and building a good tech stack with the right partners are amongst the core building blocks needed in order for businesses to launch a buy now, pay later (BNPL) solution successfully, according to a joint study published by publishing services firm Deloitte and cloud banking platform Mambu.
“BNPL is now a key sales and conversion driver for retailers and e-commerce providers. Merchants, if they have not done so already, are looking around for an embedded finance solution that can help them design BNPL experiences at speed and at low-cost,” said João Caldeira, partner at Deloitte.
He added that BNPL is now seen as a new revenue driver. Caldeira notes that the ability to quickly add seamless installment-based payments at the point of decision has the potential to change a business.
Deloitte and Mambu have teamed up to list five core building blocks for businesses looking to develop BNPL solution. First is the value proposition: that is defining and understanding what merchants and customers need and developing a model to solve their key pain points.
Technology and data are another core block. “Developing a tech stack with best-of-breed partners to enable real-time decisioning as well as the creation of next-generation solutions that deliver distinctive customer experiences,” they wrote in the report.
Risk and compliance is also key to BNPL. Service providers are tasked with designing a risk framework that provides a competitive edge, from in-built fraud detection and management to defining the risk appetite, model, and strategy
Businesses are also called to invest in specialised talent in critical areas to compliment businesses’ existing teams, as well as build their brand and differentiate their product in the market
The final core building block, “go-to-market”, would see businesses bundling the offering within their portfolio and bringing the minimum viable product to life.
Deloitte and Mambu were inspired to make the report amidst booming demand for BNPL services. The global market is projected to be worth $3.98t by 2030, growing at a compound annual growth rate (CAGR) of 45.7%.
In Singapore alone, BNPL is expected to grow by 52.6% in 2022 to reach US$774m. It has reportedly become one of the most popular payment methods in the Lion City, with adoption expected to continue to grow at a CAGR of 25.5% through 2028.