PAYMENT SOLUTIONS
fewer than one in five ( 17 %) see lenders as responsible businesses that care about their financial wellbeing .”
A result of this is , as he points out , that more responsible and ethical business models are emerging across the industry to meet the demands of borrowers and ensure they are protected .
Kadagathur believes financial services firms are increasingly embracing technology to not only improve the customer experience and boost efficiencies , but also to ensure that vulnerable customers are treated fairly and are better supported . “ Utilising technology such as open banking allows firms to more accurately assess the suitability of a product and tailor it to someone ’ s needs . For lenders , this means being able to more accurately measure affordability and even adapt repayment options based on someone ’ s current financial situation , enabling them to provide more tailored support to borrowers .”
BNPL and the credit slump Buy Now , Pay Later services thrived during 2020 and 2021 , as a boom in online shopping and embedded finance-facilitated retailers during the pandemic . But , in recent months , trouble has brewed in this superscaling financial sector as valuations among leading BNPL providers , which swelled ten-fold over COVID-19 , tumbled back to prepandemic levels .
The problems have been caused by rising inflation and interest rates , as well as customers who are now struggling to pay off the instalment debts they accrued during more plentiful times .
Keith Serdon , Chief Commercial Officer at
Mollie , explains : “ Whether it ’ s direct debit , debit card or credit card payments , consumers are not always in a position to pay for goods upfront and in full – particularly
“ People are looking for payment methods that offer them financial flexibility and allow them to utilise their purchasing power on their terms ”
KEITH SERDON CHIEF COMMERCIAL OFFICER , MOLLIE
as we face a prospective recession and economic strain following the pandemic .
“ As a result , we ’ ve seen the rise of Buy Now , Pay Later ( BNPL ) growing in both usage and acceptance , particularly with the younger generations who are usually more digitally savvy . The latest analysis predicts that the payment method is expected to grow by
50.5 % on an annual basis to reach US $ 29.9bn in 2022 .”
However , as Serdon says , this rise in popularity is also leading to increased regulatory scrutiny for better consumer protection , as some critics dub BNPL as just another avenue for debt . A recent UK report using data from the Citizens Advice Bureau suggests that this is at least partly true , as even as far back as January this year , data showed that at least 30 % of UK BNPL customers were struggling to repay the loans .
100 October 2022