Buy now, pay later it is in I play the future of credit cards

While millions of people shop on the Internet every day to buy their needs in the days of the pandemic, a phrase that may have disappeared for many years comes to the surface, namely the ability to buy now and then pay at rate, in what seemed to be a return to a bygone era in which the purchase of goods a rate was the dominant feature of Mashhad. Retail trade in the global economy.

A Bloomberg report indicates that the fashion to buy They come back in force matters prime to rate With the entrance in game of financial technology companies, playing the role of a third party in able to provide liquidity to the buyer and pay competitive prices to the producer of the commodity, these companies will transform in financial intermediary in a scenario whose broad title is “all are beneficiaries”.

Unlike credit card installment programs that provide for at least one down payment, the purchase programs designed by fintech companies such as Affirm, Afterpay and Klarna do not provide for any down payment and are offered in the form of microloans to rate from 4 rate.Less capital turnover and better returns for those companies.

The seller, not the buyer

In a new approach followed by financial technology companies, the lion’s share of the profits of these companies comes from the retailer, in in this case the dealer, e in exchange, the returns on premiums incurred by the buyer are weak, which ensures that they attract a large segment of customers.

And this new policy seemed to represent stiff competition for financial products offered by banks, in particularly credit cards, which get much higher returns, which in ultimately they are the responsibility of the final consumer of the goods, who will naturally go to the new product offered by the financial technology companies.

A report released by CB Insights predicts sales of raw materials prime that use premiums will grow 10-15 times by 2025 to surpass the trillion dollar level, which is a huge boost for fintech companies that are playing the role of the new middleman between seller and buyer after decades long. in to which the banks were the only protagonists of the mediation role.

In the United States alone, between $ 20-25 billion was spent last year to purchase assets using the new premium system offered by fintech companies, reaching an all-time high in what appeared to be the new buying trend within the world’s largest economy, according to data from Bloomberg Intelligence, which also indicated, the premium penetration rate represents about 3% of the country’s total e-commerce.

competition on

The competition received from banks’ banking products is not limited to financial technology companies, or what is known as “fintech,” as other giant companies such as Apple have started to join the line.

Since last year, Apple has announced plans to sell its products to rate through the Apple Pay service, also making rate in 4 payments with simplified interest, which represents a severe blow to the origin of the installment sale provided by the credit cards of the main international credit cards. banks.

Fintech companies promote themselves as security brokers more than banks to provide liquidity, as well as the drop in the price of the final product compared to what the consumer pays with credit cards, which raises questions about the ability of banks to compete or their complete disappearance from the installment sales scenario, which for many years represented one of the most important sources of interest income in banks’ balance sheets.

Read More About: Business News

Follow AsumeTech on

More From Category

More Stories Today

Leave a Reply