Revolut’s planned BNPL launch could retain users
The news: Revolution will take a dip in the buy now, pay later (BNPL) space, according to the Evening Standard, citing an interview with its CEO, Nikolai Storonsky.
- The British neobank intends to test the offer next year in parts of Europe, with plans to roll it out for its 17 million users.
- The BNPL function of the neobank will apply to both online and in-person purchases. Storonsky described an example in which installment payments could be made in third over several weeks.
Trend research: Revolut is the latest company to play in both digital banking and BNPL or is considering doing so. Recent examples include:
- Square: The US-based fintech, which acts as a neobank for small and medium-sized enterprises (SMEs), announced in August 2020 that it would to acquire After payment, an Australian BNPL company, in a transaction worth approximately $ 29 billion. Afterpay, which operates in several countries, is also Planning by entering the neobank on the consumer side on its domestic market.
- Goldman Sachs: The banking giant, which offers its Marcus direct bank to US and UK customers, is partnership with Apple to feed a next BNPL product appointed internally Apple Pay Later. Businesses already collaborate on Apple Card.
- Klarna: The Swedish supplier of BNPL offers savings accounts in its home market and in Germany.
The opportunity: Neobanking can quickly increase adoption of a BNPL product by aggressively promoting it to a large existing customer base. Revolut users who adopt BNPL can become more involved with the neobank by spending more time in its ecosystem and generating BNPL balances that they need to monitor and repay.
The product has greater potential for loyalty than growth of new users in an increasingly crowded BNPL market. For example, in Europe, it faces companies ranging from Pay Pal To Barclays, noted the Evening Standard. Fostering more engagement could bring Revolut closer to his goal to become a super financial app.
To better understand how banks compete with stand-alone BNPL companies, read this article from our Payments and Commerce Briefing.