5 reasons BNPL integration is needed in banking

Buy now, pay later solutions to have growth curves that are heading in an upward direction. Players from the start-up and scale-up categories are positioning themselves as new BNPL providers. It’s past time for traditional banks to join the “Buy now, pay later” trend, which is undeniably one of the biggest internet trends.

In this essay, SMARTOSC Fintech will provide 5 reasons for why BNPL banking integration in banking is essential.

Embedded Finance: Be where the customers are

The wide range of banking applications demonstrates that traditional bank offices will only be utilized in the future for more sophisticated financial transactions. Many consumers overlook the fact that banks provide a wide range of services in addition to current accounts. 

The greatest moment and location to offer BNPL banking solutions is just when the consumer needs them. The COVID crisis has significantly increased eCommerce’s growth, which is substantial.

BNPL opens up new revenue streams

Revolving credit lines and consumer credit are nothing new to banks. With the help of BNPL banking, they are able to turn these conventional financing options into a new opportunity by combining their expertise into a fresh offering that is ideal for the burgeoning eCommerce market.

The intriguing aspect of BNPL is that banks may open up fresh revenue sources in the form of merchants. The expense of digital financing solutions is often borne by retailers, while end users receive benefits like installment choices at no cost to them.

Low customer acquisition costs (CAC)

The expense of obtaining new clients through conventional channels is significant, as any Head of Marketing at a reputable bank is aware. BNPL banking should thus be viewed as a conduit for attracting new clients rather than just a source of finance. 

Although digital marketing (SEO, social media, etc.) can be highly expensive, BNPL is a very inexpensive channel that shouldn’t be undervalued in the marketing mix. The distinction between product and marketing is blurring in a novel way with this.

Trusted brands have a head start

In recent months and years, start-ups and scale-ups have had a lot of success with BNPL banking. However, they have had to make significant investments in their brands, which are extremely crucial as payment providers. In order to increase brand visibility and client trust, they had to enlist pop singers as brand ambassadors.

Everyone is familiar with the main bank names, and for many families, they have served as the primary point of contact for financial inquiries for many generations. As digital BNPL suppliers, banks may truly profit from this edge.

A new touchpoint with young target groups

In the age of Instagram, TikTok, and Snapchat, social media applications are frequently the source of the push a young person needs to make a purchase. This push typically comes in the form of influencers, recommendations, or native adverts. Getting to the appropriate internet retailer only takes a few seconds.

Banks have the chance to play a crucial role in the “social shopping” process thanks to BNPL banking. Integrating the appropriate partners, they now have a new channel to reach Generation Z: buy now, pay later. 

Observers in the fintech sector believe that the BNPL banking rise indicates new regulations will be implemented sooner rather than later. That’s excellent news for banks that are interested in entering the market because they are used to following laws and will do so better than some newcomers. If you have any queries concerning fintech, don’t be afraid to get in touch with the professionals at SMARTOSC Fintech.