Zopa sets sights on UK buy now pay later market
Digital bank Zopa has entered the UK’s £6 billion buy now pay later market.
The FinTech, which has raised $500 million from the early investors of Slack, Uber, and Alibaba, says it will only offer affordable credit by running credit checks and affordability tests for all customers.
It will also share data with credit rating agencies to give other lenders a full picture of people’s debt positions, help customers to better consolidate, structure and pay down their debt using its proprietary tools, and enable users to build their credit profiles and improve their financial positions.
Announced at Money2020 Europe this week, Zopa will roll-out its BNPL offering using a staggered approach that “carefully and closely aligns with the Treasury’s ongoing consultation in the UK”.
Its first product will offer BNPL retail finance for merchants and will be deployed through B2BC partnerships.
In a second phase, once new regulation comes into place, Zopa will launch a consumer offering.
Tim Waterman, Chief Commercial Officer at Zopa, says: “Against a backdrop of global financial uncertainty Zopa is entering the buy now pay later space to make instant, yet responsible lending decisions with products that are sustainable and fit for purpose.”
“We are ushering in the era of BNPL 2.0, an evolution of BNPL that is regulated.”
“We combine the seamless customer journeys and best-in-class digital UX offered by traditional BNPL players alongside the ability to underwrite longer, larger loans in a way that fully meets regulatory requirements.”
Apple
Apple is also venturing into the BNPL market, piling pressure on firms like Klarna and Affirm that are already grappling with investor pressure, slower online retail growth and rising interest rates.
With Apple Pay Later, which is built into Apple Wallet, iPhone and Mac users in the US can pay for purchases in four instalments over six weeks without being charged interest or other fees.
The system will tap the Mastercard network at any location that supports Apple Pay, both online and in physical stores.
