bnpl checkout page While the adoption of new wallets coming from players like Shopify and PayPal are fairly for affirm47 straightforward, payments have also morphed into new structures. “Tender types” have evolved from cash to credit & debit to new 昀椀nancing features such as BNPL. It is a common misconception to call these players lenders. We’d argue that they look a lot more like payments businesses than originators of consumer unsecured debt. Instead of being held to the con昀椀nes of FICO, BNPL companies are building their own dataset that represents a full 昀椀nancial pro昀椀le of a consumer). increasing investment flowing into the bnpl trend46 $1600 25 $1400 20 20 $1200 19 $1000 15 15 $800 10 # of deals otal funding ($M)$600 T $400 7 5 5 $200 $0 $106 $372 $219 $1,031 $1,465 0 2016 2017 2018 2019 2020 BNPL enables customers to change their relationship with cash 昀氀ow and is often most powerful when it is known that a consumer has 昀椀nancial 昀氀exibility in combination with an unfairly low FICO score. In these cases, the opportunity begins at a consumer’s 昀椀rst checkout enabling a transaction(s) to occur that otherwise would not have, and potentially at a higher average order value (AOV). From there, the consumer is in the ecosystem of that BNPL vendor and a 昀氀ywheel of referrals across other merchants in-network can occur—which sounds a lot like other payment networks we know well. In this new tender type, a consumer pays in four interest-free payments (with a fee paid by the merchant) as opposed to one standard payment with a basic issued credit card. Upon repayment, that consumer can continue to use the BNPL provider across a wide network of merchants who accept it, much like you would with Visa, MasterCard, AmEx, or PayPal in the example below. if this trend continues these players will have built their own rails of credit outside of traditional credit providers. DIGITAL PAYMENT ACCELERATION SHARE VISIT PG 32