BNPL, cards and wallets: the technology that connects the dots

BNPL (Buy Now, Pay Later) wallets are no longer positioned as an invincible challenge to international card schemes. Even the most successful BNPL app providers have opted to collaborate with supposed rivals. Afterpay, for instance, has introduced the Afterpay Plus card, a contactless Mastercard product, and Klarna extended its popular “Pay in 4” service into a physical Visa card format.

An emerging trend is to launch BNPL products on card rails, mostly for greater cost efficiency in onboarding retail partners. Visa and Mastercard have already enabled the acceptance of BNPL cards as a standard feature. Besides, card payments offer the advantage of predictable compliance, unlike non-card BNPL offerings, which have raised regulatory concerns. According to Deloitte, legislators in Singapore, Malaysia, Hong Kong, and Australia are taking actions to impose stricter regulations on BNPL providers, with similar developments expected in the US and UK.

To leverage the reliability of card industry standards and the latest innovations in embedded lending, several major BNPL providers have implemented diverse BNPL business models on OpenWay's top-rated Way4 software platform. They include JACCS (Japan), LOTTE (South Korea), Nets (European payment processor within Nexi Group), and Procco Financial Services (Bahrain).

OpenWay’s recent case study summarizes the best practices followed by these and other payment industry players, while highlighting key technology that helps companies avoid the pitfalls encountered in implementing BNPL solutions. Read our in-depth article for insights on:

• Why real-time front-to-back processing matters for BNPL customer conversion

• The 10-second BNPL plan approval – why it's a problem

• The optimal form factor to expand your BNPL acceptance network – cards or wallets?

• Exploring technology solutions to prevent instalment delinquency

• How to identify BNPL user segments and personalize repayment options for each

Rudy Gunawan, Managing Director of OpenWay Asia, and Lana Konakova, Global Product Marketing Manager, Regional Marketing in North and South America, share insights on payment processing technology that is required to meet BNPL customer expectations for on-POS, e-commerce and in-app checkouts. They explain how BNPL providers can comply with upcoming regulations and minimize delinquency risks. The case study also mentions how to overcome barriers to BNPL adoption in countries with a largely unbanked population and a significant number of non-POS merchants.