BNPL is dramatically uplifting the e-commerce business through AI and ML integrations

BNPL is dramatically uplifting the e-commerce business through AI and ML integrations

BNPL is dramatically uplifting the e-commerce business through AI and ML integrations

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Though the short-term point of sale loans is not new, BNPL has been possible because of the recent maturity of artificial intelligence and machine learning. Specifically, by taking advantage of AI/ML, BNPL platforms are empowered to collect and analyze customer data, thereby helping companies to take more sophisticated decisions and generate revenue over the longer run. Thus, this innovative payment method is facilitating companies to take advantage of data-driven strategies to unlock value in a sales environment that is shifting online.

Future of BNPL- AI/ML driven business models driving growth across organizations

With the adoption of BNPL payments, key market players need to infuse their go-to-market strategies with advanced technology, AI/ML, to make these programs sustainable. Specifically, to manage risk and respond quickly to market needs, these BNPL providers need to harness data, respond to the shift as needed, and keep pace with the evolving regulatory environment. These data-driven decisions will help the key market players to have a direct and tangible impact on the future adaptability, growth and longevity of the BNPL offering over the long run.

BNPL providers are partnering up with AI-powered technology providers to verify their identities

The BNPL payments space is highly regulated, and therefore, BNPL providers need to emphasize 'know your customer' (KYC) and anti-money laundering (AML) regulations. Therefore, BNPL platforms are partnering up with AI-based tech platforms to curb the growing fintech fraud rates. For instance,

  • In June 2022, Twisto, a Zip Company, a BNPL provider, announced its partnership with Veriff, a global identity verification provider, to provide identity verification (IDV) services for online merchants. Through this partnership, Veriff will enable the consumers to quickly and seamlessly verify their identities via Twisto's platform.
  • This partnership expedites the IDV process, ensuring compliance with know your customer (KYC) regulations. Notably, Veriff provides KYC verification with its video-first technology and offers users extra protection through location verification.

Since post integration of Veriff's technology, Twisto noticed a significant increase in the customer conversion rate; PayNXT360 expects this partnership to continue in the long run with increased benefits to both companies.

Banking software companies are launching AI-Driven Buy-Now-Pay-Later Banking Service

With the rising popularity of BNPL loans, Banking-as-a-Service (BaaS) also got revolutionized. This became important since consumers now need a frictionless digital experience and easy access to finance at the point of sale. Therefore, software companies are launching AI-based BNPL banking services to attract more customers. For instance,

  • In January 2022, Temenos, the banking software company, launched its BNPL banking service. Now, Temenos BNPL, combined with patented Explainable AI (XAI), will be able to help banks create ethically-driven lending programs.
  • Moreover, post embedding XAI, Temenos will enable banks and fintech firms to pre-approve loan applications in real-time based on pre-determined criteria, including soft and hard credit scoring.

Since this AI-based BNPL service is innovative, it is expected that the banks and fintechs will be attracted, acquiring significant customers over the long run.

To know more and gain a deeper understanding of the global BNPL market, click here.

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