With the rising prominence of buy now, pay later (BNPL) payment schemes that has fintech startups and traditional financial institutions alike rushing to offer such options to their customers, there has been a very vocal voice of warning about these popular new products. Some major financial organizations have stayed away from BNPL entirely, cautioning that such products are unreliable and nothing more than a flash in the pan.
By late 2022, there are very few of these contrarians left. By now, even traditional banks and major brands like Apple and Virgin have begun offering their own BNPL products. According to Philip Belamant, Co-Founder and Chief Executive Officer of Zilch, that may not prove a good idea for the long term: these companies haven’t discovered any true appreciation for BNPL, but rather are rushing to cash in on a trend.
“I think some have rushed to throw something together to appease stakeholders, even if they didn’t intrinsically know how to roll this out or even make the economics work for this,” Belamant said in an interview in which he called into question the financial viability of these latecomer BNPL products. “They probably had a conversation with board members and the obvious question was, ‘Where’s our solution? Why don’t we have one?’”