BNPL firms are targeting higher gross merchandise value through wider product distribution strategy

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Across African market, the competitive landscape is growing rapidly in the BNPL sector. Several players have entered the market amid the rising adoption of BNPL schemes in the region. To remain competitive and to reach more customers, fintech firms like CredPal are forging strategic alliances with businesses across industry verticals to launch new and innovative products. CredPal, in collaboration with Bolt, the ride-sharing app, has launched a ride now pay later service.

• For CredPal, the alliance will enable the firm to reach more customers, while boosting the usage of the payment solution. For Bolt, the collaboration is expected to result into more travelers using the service.
• Initially, the service has been made available only to CredPal users, as the fintech firm is responsible for underwriting the cost of the trip. Riders can repay the cost of their ride at the end of the month, unlike other regular BNPL schemes, where a portion is paid upfront.

Although, CredPal is the first to launch a ride now pay later scheme in Nigeria, this is not a new concept in the global market. Ola, the Indian ride-hailing firm, introduced credit service in 2016. Zip is another BNPL provider to launch such service in partnership with Australian ride sharing firm GoCatch.

In the Middle East, too, similar trends have emerged in the BNPL market in 2023. Tabby, in January 2023, entered into a multi-year partnership with Dubai Parks and Resorts. As part of the collaboration, Tabby has launched a new BNPL payment option using the Tabby card. The solution will enable guests to purchase park tickets and annual passes using then digital credit card offered by Tabby and split their purchases in instalments. The payment method can be used to make purchases online, offline, and through call centers.

• For Dubai Parks and Resorts, the partnership is aimed at improving the guest experience, while attracting more visitors to drive increased revenue through ticketing sales. Tabby launched the Tabby Card in 2022 as part of its vision to capture payment market share in the offline retail segment. With the online retail sector becoming significantly competitive, a growing number of BNPL firms have been targeting growth in the offline market.

The firm, in June 2023, also entered into a strategic collaboration with Majid Al Futtaim to offer in-store shoppers with a flexible payment solution in the UAE. The two players are also planning to expand their partnership in the international markets from the short to medium-term perspective.

In the United States, as well, BNPL providers are entering into partnerships with businesses across industry verticals. Retailers, for instance, have been planning to leverage the payment solution to drive sales and revenue. And as a result, entering into collaboration with BNPL firms.

• At Home, the United States-based home décor retailer, announced the launch of a BNPL payment method in partnership with Synchrony Pay Later in July 2023. The collaboration will enable shoppers to split their purchases ranging from US$75 to US$400 in three instalments at zero-cost. With the launch of the payment method, the retailer is targeting higher sales and revenue growth, which has been impacted due to the decline in consumer spending owing to higher inflation rate.

The partnership is expected to bring more users to Synchrony Pay Later from the short to medium-term perspective. To simplify the registration process, Synchrony is allowing shoppers to register using a QR code at the time of checkout. If approved, shoppers can make the purchase immediately.

PayNXT360 expects BNPL firms to further partner with business across industry verticals to widen the distribution of their product offerings. This will support the competitive landscape and market growth from the short to medium-term perspective.