FinTech: In This BNPL Roundup, Monzo And Revolut Mulling Entry

September 13, 2021 | FinTech, News

Here’s a roundup of recent news in fintech’s ‘buy-now-pay-later’ (BNPL) space.

Read up on why British challenger banks Monzo and Revolut are plotting moves to enter the BNPL space; Italian fintech Scalapay’s big raise, DivideBuy’s lending facility, Wisetack’s “in-person” BNPL, and US shoppers are falling behind on BNPL payments.

Monzo and Revolut to jump into BNPL fray

Two prominent challenger banks, Monzo and Revolut, are eyeing the BNPL space. A source told CNBC that Monzo would introduce “affordability checks” for the service.

On the other hand, Revolut, which has gone on a spree of newly-launched products after its $800 million funding round, is also considering BNPL, according to CEO Nik Storonsky last week. He was speaking to the Standard. (CNBC)

Scalapay raises $155 million

Italian BNPL Scalapay last week raised $155 million in a Series A round led by Tiger Global, choosing the US VC firm over European financiers because it has an eye on the US market.

Scalapay’s beat is currently continental Europe, where it offers its BNPL primarily to the luxury fashion sector.

The firm is also considering a launch into the UK market. (Sifted)

DivideBuy’s £300M lending facility

UK BNPL provider DivideBuy made headlines after it reported an average three-year growth rate of 20,733% to the year 2019/2020. It announced Friday it had secured a £300 million lending facility from global investment management firm, Davidson Kempner Capital Management LP. The amount also includes a minority equity investment.

The firm focuses on the interest free credit POS finance market, estimated to be worth nearly £10 billion in 2020, and £27 billion by 2024.

“The sheer scale of this investment underlines the strength of DivideBuy’s business model, and how we’re revolutionizing the POS finance sector by owning the full lending journey with assistive technology, automated soft credit checks and transparent lending with no hidden fees,” said Rob Flowers, Founder and CEO of DivideBuy. (CROWDFUND Insider)

Wisetack raises $45 million for in-person BNPL

San Francisco-based Wisetack brings the BNPL product to in-person services. For example, for a major home repair job, the contractor may allow the customer to pay in installments via Wisetack’s service.

Compared to 2020, Wisetack’s revenue has grown over ten times in 2021, year to date, while working with thousands of merchants. (TechCrunch)

US BNPL users falling behind on payments

According to Reuters, which quoted personal finance company Credit Karma, a third of U.S. consumers who used “buy now, pay later” services have fallen behind on one or more payments. Worse, 72% said their credit scores were worse off for it.

“It’s easier than ever to purchase an item — and finance it — without even thinking about the implications of the purchase,” said Colleen McCreary, financial advocate at Credit Karma. “It’s this disconnect between making a purchase and actually paying for it where consumers can get in trouble.” (Reuters)

Related Story: PayPal To Acquire Japanese BNPL Pioneer Paidy For $2.7B

Image Credit: Wikimedia Commons

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