Outside of the United States, the Buy Now, Pay Later (BNPL) industry has taken the world by storm. Although the term may be fairly new in the U.S., installment payments are not; in fact, it was the most popular form of credit in the 1970s and was the inspiration behind the eventual launch and release of the modern-day credit card. Today, Americans owe approximately $820 billion dollars in credit card debt, a jarring number given the implications deficit can bring.
However, the BNPL model offers consumers the ability to purchase a product or service and pay it back over an extended amount of time, with low to zero interest and fees. In addition, rather than a large lump sum charged to a credit card in one single transaction, consumers can opt to spread payments out, a solution that helps shoppers’ budget better and avoid falling deeper within the slums of credit card debt.
Like any loan or borrowed form of payment, BNPL can have its obstacles, with numerous limitations on how high of a ticket item can be purchased through BNPL, as well as for how long payments can be made. With the many restrictions most traditional providers implement, one company, in particular, wanted to become the driving tectonic change in the payments space, seeking to provide a financial solution for consumers who craved transparency, flexibility, and affordability – meet Openpay.
Openpay Group Ltd (ASX: OPY) is a global, fast-growing, and highly differentiated provider of BNPL payment solutions. Openpay delivers the most flexible BNPL plans in the market through its platform, with longer terms – up to 24 months – and with higher limits of up to $20,000. In December 2020, on the anniversary of its initial public offering, Openpay launched Opy USA (Opy), its U.S. counterpart, with the mission of providing a greater range of meaningful financing opportunities for consumers across all industries. Unlike other BNPL companies, Opy enables strategic purchase planning, predominately focused on big-ticket purchases in Home Improvement, Education, Auto Service and Repair and Health (including Dental and Veterinary practices), for consumers who are more financially mature than typical customers of traditional providers. Opy takes the no surprises, fixed costs approach and expands this to bigger dollar, longer-term arenas with no hidden fees or accrued interest charges.
The benefits of Opy are next generation, as it enables life-changing purchases for consumers, avoiding additional credit card debt and eliminating the risks of traditional POS lending. Coined as the ‘Buy Now, Pay Smarter’, solution, it’s valuable for merchants as well. Not only can businesses provide payment alternatives for customers to afford meaningful purchases (this is particularly true for customer demographics that, without BNPL, may not be able to budget for larger purchases otherwise), BNPL also boosts key business metrics of conversion and average transaction values. Additionally, with Opy, consumers are confident that they can pay off an item with ease, resulting in loyal shoppers who will choose merchants with BNPL options in the future.
BNPL isn’t just a concept, for even the largest financial institutions are scrambling. Earlier this year, Jamie Dimon, Chief Executive Officer of JP Morgan Chase, warned his C-Suite team to be alarmed of the changes BNPL would extend among American shoppers, urging them to be “scared s- – -less.”
The U.S. payment landscape is going through a substantial change. Players like Opy have separated as the modern human equivalent in contrast to the Neanderthal BNPL version 1.0 and legacy payment providers by standing tall and looking to the horizon. Opy brings fairness, transparency, and flexibility to merchants and consumers alike, thereby building the payment solution consumers crave and defining the future of payments; it’s exciting to be a part of the sunrise on the evolution in payments fintech.