Two EU FinTechs want to counter buy now, pay later with “pay now, finance later.”
Enfuce, a Finnish card issuing company, and financial services firm Orka Ventures said Wednesday (Jan. 11) that they had teamed to launch Orka Card, a consumer lending card and mobile app that “challenges” the understanding of buy now pay later (BNPL).
“Until now, Orka Ventures has focused mainly on providing web-based consumer loans,” the companies said in a news release.
But as consumer demands change and Orka evolves into a neobank, it will tap into Enfuce’s “agile modular processing and compliance capabilities” to launch card services across its markets in Central Europe and the Nordic countries.
The new capabilities let customers integrate their existing bank accounts into one card and app. Customers also get access to Orka’s pay now finance later (PNFL) program, which lets customers refinance transactions that were completed through other debit and credit cards.
“By allowing cardholders to repay a previously purchased item on a payment plan in fixed monthly installments, Orka Ventures is facilitating financial literacy and financial health through reducing a borrower’s risk of overextension," the release said.
The launch of Orka Card comes as consumers are increasingly using BNPL in the face of economic uncertainty, and companies are offering new forms of financing, as PYMNTS wrote earlier this week.
Research by PYMNTS shows that a little more than half of consumers tried a new payment option in 2022, with 59% of those options reliant on digital wallets.
“BNPL solutions are poised to capture a large portion of this future global spend as the contemporary landscape’s ongoing digital evolution continues to transform the way consumers shop and pay for goods and services,” PYMNTS wrote.
This week also saw reporting on the need for convenience when using BNPL tools, both in-store and online.
Studies have shown that 70% of consumers will spend more when using BNPL than they would otherwise, and 47% of consumers reported that they select merchants based on their partnerships with preferred BNPL providers. This can mean huge potential revenue gains for merchants if they offer BNPL to their customers in-store and online.
However, demand for convenience is also rising, and a lack of ease can outweigh affordability. Research shows that 32% of shoppers say the speed of purchase is their top priority, followed by an independent shopping experience at 27%.
That means merchants need to be aware of potential obstacles to customers’ shopping processes, and be ready to deal with them.
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