Buy now, pay later services have gained more grounds and are fast becoming a major financial category. The Coronavirus pandemic helped fasten the adoption of the service and contributed to bringing it to its current level. These services allow people to make purchases and pay for them at a later date with little and (mostly) no interest.
Santander, a Spanish bank has announced that it is launching its own buy now, pay later service in Europe as it plans to leverage the opportunities the category has as well as compete with fintech rivals that seem to have taken over the financial space.
The Spanish bank announced on Wednesday that it will roll out its buy now, pay later service called Zinia, which will allow people to make purchases and make repayments in interest-free monthly instalments, just like how other BNPL firms do. The bank said the service would launch across various markets this year starting with the Netherlands.
According to the Spanish bank, Zinia’s technology has been operational for the last year in Germany where it already has over 2 million users.
Santander isn’t coming into the market to tag along with others. According to Ezequiel Szafir, the CEO of Santander’s Openbank online banking division, the company’s goal is to “become a leader in the buy now, pay later market”. He didn’t stop at that, he highlighted “the security and trust provided by a large financial group” as one of the major differentiators between its service and that of other BNPL providers such as AfterPay and Klarna.
The BNPL category has also gained attention after other major companies started to delve into it. For instance, Jack Dorsey’s Block showed interest in AfterPay and agreed to acquire it for $29 billion in August last year. Goldman Sachs has also agreed to buy fintech lender GreenSky for $2.2 billion. A host of other companies have in one way or the other shown interest in the BNPL sector.
The sector, although it is experiencing a boom, has started to see increased scrutiny from regulators over allegations that these services only help people to accumulate debt.
Today, Klarna which is one of Europe’s biggest BNPL providers announced that it was launching a physical card for users in the UK, signifying that it is taking its offerings to the next level.