Brits buy now, pay later companies: AppToPay, Butter and Curve

Swedish credit colossus Klarna isn’t just Europe’s most valuable start-up with an estimated $ 31 billion, it’s also a verb.

Rather than paying for something up front using their debit card or making a big purchase on a credit card, a growing number of shoppers, especially the younger ones, are choosing “Klarna” instead.

It could mean paying for their clothing store a month after buying it, or spreading the cost over three, four or more weekly or monthly installments with the promise of no interest.

Buy Now, Pay Later platforms have signed up millions of users with interest-free payment credit offers

Although it only represents a small percentage of the online credit market, the buy-it-now, pay-back industry is booming, and others want a share, as controversial as it is.

Familiar names like John Lewis, Marks & Spencer and Next have built or are creating their own in-house deferred payment systems, while both Main Street and online retailers have teamed up with Klarna, PayPal. and Antipodean. imports Clearpay, Laybuy and OpenPay.

And while most of the vendors that populate the checkouts are imports, there are several local versions that, although you may not have heard of them, are hoping to cash in on the credit craze at checkout.

These are based on Doncaster AppToPay, Based in London Butter and Curve, which is based in Bristol and London.

How do these companies differ and what are the unique selling points? It’s money take a look:

Butter: ‘original’ UK supplier buys now, pays later

Claiming to be the UK’s leading supplier of BNPL, Butter, which comes with the slogan ‘spread the costs’, came into being in 2017 as a service aimed primarily at travelers.

Founded by Timothy Davis, Nik Haukohl and Stefan Hobl four years ago, the company was previously called Pay Monthly Travel, then Sploor, and allowed borrowers to spread the cost of flights.

It still offers that, along with vacations, with breaks in Berlin, Istanbul and Oslo marketed as being available for under £ 20 per month.

A return flight to Amsterdam from London Heathrow would cost £ 162.66 round trip, reimbursed in 10 installments of £ 16.26 each.

Butter started life as a company called Pay Monthly Travel, and still allows borrowers to spread the cost of flights over monthly installments.

Butter started life as a company called Pay Monthly Travel, and still allows borrowers to spread the cost of flights over monthly installments.

Butter co-founder and CEO Timothy Davis

Butter co-founder and CEO Timothy Davis

However, with the coronavirus pandemic resulting in widespread stranding of international flights and a boom in online shopping, the company has changed course.

In July 2020, he changed his name to Butter, adopted the installment payment credit model that has become well known thanks to companies like Klarna, and raised £ 15.8million at the end of last month.

Although it is a relatively small and probably unknown name, with assets of just £ 2.06million at the end of 2019 according to its latest accounts, it has already made deals with some big names in the street, including Argos, Asos, Currys PC World, IKEA, Smyths Toys and Zara.

Unlike some more well-known BNPL providers, however, Butter cannot be used as a payment option at retail checkouts. Instead, users have to download a mobile app and make purchases there.

They can be spread over two, three or four installments, and affordability checks are carried out beforehand, with users having to provide their bank details through open banking and the reference agency Credit Kudos.

It charges no interest, but a late payment fee will see borrowers charged £ 12.

It has now turned to offering interest-free credit to buyers in partnership with retailers like IKEA and Zara.

It has now turned to offering interest-free credit to buyers in partnership with retailers like IKEA and Zara.

AppToPay: the family business based in Doncaster

Founded in 2018 in Bawtry, a market town just south of Doncaster, AppToPay is a credit card and loan hybrid that grew out of a family-owned clothing store called Robinsons.

The concept, founder James Jones told This is Money, came about trying to sell ‘thoughtful purchases’ like £ 1,000 Mulberry handbags’ to people with stable incomes who don’t have lump sum ” on hand.

After an affordability check, again carried out via Credit Kudos, borrowers would be given a credit limit of up to £ 2,000, like a credit card.

James Jones, Founder of AppToPay

James Jones, Founder of AppToPay

AppToPay was launched after the experience of James Jones' family business, the Robinsons clothing store, in Yorkshire

AppToPay was launched after the experience of James Jones’ family business, the Robinsons clothing store, in Yorkshire

However, all repayments are made on fixed monthly terms, ranging from two to 12 months, depending on how much borrowers can afford to repay each month.

AppToPay is also fairly transparent with the potential drawbacks of missing payments, detailing at the bottom of its website that missed payments are subject to a £ 12 fee and that “ all options other than an outright payment have a risk. potential to damage a credit score. ”

AppToPay works like a hybrid between a credit card and a loan

AppToPay works like a hybrid between a credit card and a loan

The company is regulated by the Financial Conduct Authority and also grants borrowers credit card-like protections under Section 75, which could be more widely rolled out in the purchasing industry now, payments later.

Commenting on the more overt warnings on the site, Jones told This is Money “ that people should be able to make an informed decision about what to buy, both with AppToPay and the goods. ”

The program is currently in the trial-only stage with Robinsons, with more than 6,000 applications in the past two years, according to Jones, although not all of them are accepted because the trial is “ funded on our backs. ”

Although it is app-based, it is only available for in-store purchases, after which the app is downloaded and the purchase is made through it, a process that takes “ approximately 25 seconds ”. .

He added: ‘We are in early talks with a number of potential investors and strategic partners to enable us to expand our offering to consumers,’ but said he was unable to disclose more details for now.

Curve credit: the last card in the wallet

Curve was released in 2016 and has come to be known as the “ card that lets you use multiple cards at once. ”

At one point, briefly, it even became a way for people to use American Express cards in places that would not otherwise accept Amex.

Since then, it has expanded its product line, offering premium and metal cards with monthly fees and additional perks, and allowing people to rewind their purchases in order to purchase them with another card.

Curve allows users to load multiple maps onto a single app and choose which one to sync with a physical map

Curve allows users to load multiple maps onto a single app and choose which one to sync with a physical map

He is currently testing Curve Credit, which will allow people to repay buyers in installments.

He is currently testing Curve Credit, which will allow people to repay buyers in installments.

Now, in order to strengthen its position in the subsequent payment arena, it is testing “Curve Credit”, which will allow “customers to split any transaction into several installments with a single click”.

Potential customers can currently only join a waiting list, which does not require them to be a Curve customer.

Details are still pretty thin on the ground, but, according to Techcrunch, borrowers will either owe money to Curve after making a purchase on the card, or to another lender in a market-type model.

The app-based card provider had 2 million customers at the start of this year, although there has been lingering controversy over how many use these cards regularly.

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