Buy Now, Pay Later: Swap launches Brazil's first white label solution

August 17, 2021
Por
Swap
Swap
Swap
Full service financial technology partner
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https://feestverlichtinggroothandel.com/
Swap is closely following the new technological advances and brings to the market a new solution so that companies can offer even more financial services to their customers.

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The BNPL Solution powered by Swap

With the advancement of “Buy Now Pay Later” (BNPL) solutions, Swap takes another step in its journey of technological innovation and launches the first White Label (BaaS) solution for BNPL platforms in Brazil.

One of the ways to spread BNPL solutions is to increase acceptance by retailers and other establishments – at Swap, we resolved this point with the Mastercard network and through the use of single use virtual cards (Single Use – Virtual Card Number, SU -VCN), a feature little explored by the market, but equally accepted throughout the Mastercard network, with more than 2 million establishments.

In addition to solving the BNPL acceptance issue, Swap also ensures that the credit is only used for specific purposes, through its multiple balance and shared authorization solution with flexible and configurable rules.

For example, if your BNPL solution seeks to provide targeted credit for purchases in the electronics segment, you can issue single-use virtual cards, accepted at any establishment (without the need for direct integration) and still ensure that the use of credit will be directed to the specific purpose, that is, in selected stores and only for the purchase of electronic products.

This is how Swap brings the first White Label (BaaS) solution to Buy Now Pay Later (BNPL) platforms in Brazil. Focusing on the issue of acceptance of these platforms and expanding the range of consumer financing for goods and services, our solution combines SU-VCN (virtual single-use cards) and our flexible and configurable authorization structure with existing BNPL initiatives as for the ones that will emerge.

It works like this:

BNPL by Swap operating diagram
  • The customer finds the product he wants to buy, requests credit for his company and sets the payment terms (amount, term and conditions);
  • Then, your company analyzes the customers' credit request and, after approved, requests the creation of a virtual card with us;
  • Via the Swap platform, you create and load the virtual card – here it is important to point out that for the loading to take place, it is essential that there is money from your company in the Swap;
  • With the virtual card released, the customer makes the purchase, the virtual card is canceled and then you issue slips or other means for the customer to pay for the purchase that was paid in installments by your company using the Swap platform.


But what is ‘Buy Now, Pay Later’?

Probably, at some point you saw or heard in the media about the rediscovery of the “good old” credit service at Casas Bahia. The news brought up a very current theme, but with not so new roots: “Buy Now, Pay Later” (BNPL) – it is also worth reading the recent article that our CEO published on the impacts of BaaS on the market.

The search for the subject gained greater projection after the announcement that Apple Pay, Apple's digital payment system, will start to pay in installments, a service provisionally called “Apple Pay Later”.

Giving credit is not necessarily something new, but the institutionalization and democratization of credit was responsible for leveraging retail and business. In Brazil, credit played an essential role in the development of the vehicle industry in general, household appliances, furniture and other durable consumer goods, especially the famous "credit service" - a form of financing of goods and services with fixed installments, in addition to interest and built-in monetary correction.

Advances in payment methods have transformed the way in which credit is granted and made access to consumer goods even more democratic. No wonder, in 2004, the great spreader of the installment plan culture, the Casas Bahia chain, entered into a partnership with a large national bank to operate financial products and services directly to the chain's customers.

It is precisely this technological evolution that puts “Buy Now, Pay Later” solutions at the center. Currently, there are several platforms that are bringing even more inclusive and innovative models to the market, expanding access to cheaper credit (without abusive fees). Technology rescued the installment plan.

The growth of ‘Buy Now, Pay Later’

BNPL services are exactly what the name promises, that is, services that allow customers to buy something, most often through online stores, to pay later, either in full or in installments.

Credit cards, which are not that new either, are very useful financing tools in this context. The big “disadvantage” of conventional credit cards is that balances are accumulated until the cardholder pays them, which means that there is a consumption limit that can pose a problem in a more emergency situation. We cannot forget that in Brazil there is still an additional factor: complex credit analysis for granting cards to customers. Often the customer has no credit history and therefore getting a card becomes more difficult. No wonder we still have more than 34 million people without bank accounts and approximately 90 million without credit cards.

It is worth noting that there are still elements that can make credit analysis even more complex when it is not restricted to the individual, but also concerns what the individual will acquire. For example, the decision to lend R$10,000 to João to buy an iPhone is more complex than to lend R$10,000 to João – and even more complex when the idea is to lend R$10,000 to João to buy one. travel package to the next World Cup.

This complexity exists, as in addition to the credit history, the use that will be made of the resource being raised and the future payment capacity for that particular purpose is considered, in addition to other elements that may increase the risk of default. In this way, sometimes the customer may have their request refused.

Although the scenario is complex, just as installment plans have democratized access to credit and durable consumer goods, “Buy Now, Pay Later” solutions are including the younger generations in the consumer world.

The generation that uses the BNPL the most are millennials (born between 1981-1996), but Generation Z (born between 1996-2010) is also following the same trend, especially due to their familiarity with the digital environment.

What BNPL solutions are on the market?

In this universe that opens up with the advancement of technology, there are new business models being explored with BNPL, among them, we highlight:

  • Integrated shopping apps – more popular models that offer shopping, payments, financing and banking products on a single platform, such as e-commerce platforms;
  • “Cardless” financing solutions (more like the installment plan we know) – are financing solutions for goods and services without the use of a credit card;
  • Virtual “rental for property” models – model that mainly serves people with negative credit history or no credit history, where a product is rented and the customer has the option to purchase the product at a certain time;
  • Card-linked installment offers (the most adopted model in countries in Asia and Latin America) - these are the purchases of higher amounts in installments, via credit card, but without interest, fees or credit analysis in periods that exceed the conventional ones " within 12 months”.

With Swap's BNPL solution, we continue on the journey to enable different companies to offer financial services to their customers, independently and attentive to market opportunities, making impossible stories possible.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

The BNPL Solution powered by Swap

With the advancement of “Buy Now Pay Later” (BNPL) solutions, Swap takes another step in its journey of technological innovation and launches the first White Label (BaaS) solution for BNPL platforms in Brazil.

One of the ways to spread BNPL solutions is to increase acceptance by retailers and other establishments – at Swap, we resolved this point with the Mastercard network and through the use of single use virtual cards (Single Use – Virtual Card Number, SU -VCN), a feature little explored by the market, but equally accepted throughout the Mastercard network, with more than 2 million establishments.

In addition to solving the BNPL acceptance issue, Swap also ensures that the credit is only used for specific purposes, through its multiple balance and shared authorization solution with flexible and configurable rules.

For example, if your BNPL solution seeks to provide targeted credit for purchases in the electronics segment, you can issue single-use virtual cards, accepted at any establishment (without the need for direct integration) and still ensure that the use of credit will be directed to the specific purpose, that is, in selected stores and only for the purchase of electronic products.

This is how Swap brings the first White Label (BaaS) solution to Buy Now Pay Later (BNPL) platforms in Brazil. Focusing on the issue of acceptance of these platforms and expanding the range of consumer financing for goods and services, our solution combines SU-VCN (virtual single-use cards) and our flexible and configurable authorization structure with existing BNPL initiatives as for the ones that will emerge.

It works like this:

BNPL by Swap operating diagram
  • The customer finds the product he wants to buy, requests credit for his company and sets the payment terms (amount, term and conditions);
  • Then, your company analyzes the customers' credit request and, after approved, requests the creation of a virtual card with us;
  • Via the Swap platform, you create and load the virtual card – here it is important to point out that for the loading to take place, it is essential that there is money from your company in the Swap;
  • With the virtual card released, the customer makes the purchase, the virtual card is canceled and then you issue slips or other means for the customer to pay for the purchase that was paid in installments by your company using the Swap platform.


But what is ‘Buy Now, Pay Later’?

Probably, at some point you saw or heard in the media about the rediscovery of the “good old” credit service at Casas Bahia. The news brought up a very current theme, but with not so new roots: “Buy Now, Pay Later” (BNPL) – it is also worth reading the recent article that our CEO published on the impacts of BaaS on the market.

The search for the subject gained greater projection after the announcement that Apple Pay, Apple's digital payment system, will start to pay in installments, a service provisionally called “Apple Pay Later”.

Giving credit is not necessarily something new, but the institutionalization and democratization of credit was responsible for leveraging retail and business. In Brazil, credit played an essential role in the development of the vehicle industry in general, household appliances, furniture and other durable consumer goods, especially the famous "credit service" - a form of financing of goods and services with fixed installments, in addition to interest and built-in monetary correction.

Advances in payment methods have transformed the way in which credit is granted and made access to consumer goods even more democratic. No wonder, in 2004, the great spreader of the installment plan culture, the Casas Bahia chain, entered into a partnership with a large national bank to operate financial products and services directly to the chain's customers.

It is precisely this technological evolution that puts “Buy Now, Pay Later” solutions at the center. Currently, there are several platforms that are bringing even more inclusive and innovative models to the market, expanding access to cheaper credit (without abusive fees). Technology rescued the installment plan.

The growth of ‘Buy Now, Pay Later’

BNPL services are exactly what the name promises, that is, services that allow customers to buy something, most often through online stores, to pay later, either in full or in installments.

Credit cards, which are not that new either, are very useful financing tools in this context. The big “disadvantage” of conventional credit cards is that balances are accumulated until the cardholder pays them, which means that there is a consumption limit that can pose a problem in a more emergency situation. We cannot forget that in Brazil there is still an additional factor: complex credit analysis for granting cards to customers. Often the customer has no credit history and therefore getting a card becomes more difficult. No wonder we still have more than 34 million people without bank accounts and approximately 90 million without credit cards.

It is worth noting that there are still elements that can make credit analysis even more complex when it is not restricted to the individual, but also concerns what the individual will acquire. For example, the decision to lend R$10,000 to João to buy an iPhone is more complex than to lend R$10,000 to João – and even more complex when the idea is to lend R$10,000 to João to buy one. travel package to the next World Cup.

This complexity exists, as in addition to the credit history, the use that will be made of the resource being raised and the future payment capacity for that particular purpose is considered, in addition to other elements that may increase the risk of default. In this way, sometimes the customer may have their request refused.

Although the scenario is complex, just as installment plans have democratized access to credit and durable consumer goods, “Buy Now, Pay Later” solutions are including the younger generations in the consumer world.

The generation that uses the BNPL the most are millennials (born between 1981-1996), but Generation Z (born between 1996-2010) is also following the same trend, especially due to their familiarity with the digital environment.

What BNPL solutions are on the market?

In this universe that opens up with the advancement of technology, there are new business models being explored with BNPL, among them, we highlight:

  • Integrated shopping apps – more popular models that offer shopping, payments, financing and banking products on a single platform, such as e-commerce platforms;
  • “Cardless” financing solutions (more like the installment plan we know) – are financing solutions for goods and services without the use of a credit card;
  • Virtual “rental for property” models – model that mainly serves people with negative credit history or no credit history, where a product is rented and the customer has the option to purchase the product at a certain time;
  • Card-linked installment offers (the most adopted model in countries in Asia and Latin America) - these are the purchases of higher amounts in installments, via credit card, but without interest, fees or credit analysis in periods that exceed the conventional ones " within 12 months”.

With Swap's BNPL solution, we continue on the journey to enable different companies to offer financial services to their customers, independently and attentive to market opportunities, making impossible stories possible.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
Apoyado por:
Mastercard
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