Britain’s largest private digital company chief executive is developing a product that allows customers to stretch the cost of purchases made online and in person.
By way of illustration, a checkout function and the ability to automatically amortize every purchase its 16 million customers make using the company’s cards are in the works, according to CEO Nikolay Storonsky.
“Simply a button which you switch on and then your card becomes a buy now pay later product. Instead of paying upfront everything, you pay a third, and then in two weeks, we charge you a third and then another third.”
Product is already in the works
According to a spokesperson, the products are still in the early stages of development and are expected to be tested initially on select European markets next year before moving on to other countries.
Whatsmore, BNPL is marketed as a cheaper alternative to credit cards by companies that offer consumers the service. In general, buy now, pay later allows online shoppers to stretch the cost of goods over a period of time, generally over three installments. When re-payments are paid on schedule, BNPL firms usually do not impose interest. However, a fee is charged to merchants that accept it as a payment method.
During the pandemic, the usage of buy now, pay later grew significantly, becoming a modest but substantial competitor to credit cards. According to the FCA, the size of the U.K. market nearly tripled last year, reaching £2.7 billion. Since the beginning of the epidemic, 5 million Britons have used the product.
Square (NYSE: SQ), established by Twitter founder Jack Dorsey, recently acquired Australian BNPL firm Afterpay for $29 billion, underscoring the sector’s dynamism and growth. While in June, an investment round in Klarna valued it at $45 billion while other companies, including PayPal and Barclays, have developed their own BNPL-based solutions.
Expansion plans for Revolut
For Revolut, the objective is to become a super app. Other services, such as buying and selling cryptocurrencies, have been added to Revolut since its launch.
Moreover, Revolut has created a new product that gives employees early access to their salaries in cooperation with employers. Payday, a Revolut product, allows employees to withdraw 50% of their income as they earn it and quickly transfer the money into their accounts.
Revolut now has over 16 million customers globally, with Revolut Business users accounting for at least 500,000 of them. The platform is currently expanding, with the U.S. and India being the most recent significant markets to be included.
Not least of all, a few months after becoming Britain’s most valuable private digital business, Revolut has announced plans to enter the BNPL marketplace. In an $800 million fundraising round in July, investors valued the company at $33 billion.