Jul 25, 2022

How does Buy Now, Pay Later leverage Open Banking ?

Buy Now Pay Later (BNPL) represents 1 billion euros of turnover in the French payment market and is expected to reach 25 billion euros by 2025, according to Pierre-Yves Platini, CEO of Mind

That’s 12% share of the very competitive European market which will represent about 300 billion in revenues in 2025, according to Bruno Cambounet from Sopra Banking Software !


Times are changing

Due to interests on default payments, many clients found themselves with more and more debts which they couldn’t pay and that in turn incurred default payment interests, locking them up in a vicious circle of BNPL default payment debt. Also it is not considered as a form of credit and is not regulated as one.

It’s changing. 

BNPL will soon be subject to regulations, particularly on the KYC* side. This is where Open Banking comes into play!

Reminder : Open Banking is also known as “open bank data.” Open Banking is a banking practice that gives third-party financial service providers open access to consumer banking, transaction, and other financial data from banks and non-bank financial institutions through the use of APIs. 


New players are entering the game

A direct benefit of Open Banking for BNPL is that KYC is already validated if the BNPL provider uses Open Banking for the payment, as access to the client bank data is part of the process !

Many new projects are shaping up around this possibility, such as Algoan, represented by their CEO Michael Diguet.

This French fintech wants to revolutionize the credit sector by making it fairer and more responsible. They develop a Credit Scoring API, that provides fintech, retailers, and financial institutions with credit decisioning tools that can be embedded into the BNPL process, with many more applications.


At Qori, we are welcoming the emergence of a number of Open Banking based projects that will allow both the credit granting institution and the client to contribute to the credit worthiness process. We are moving towards the era of responsible BNPL, with benefits for the client, such as the assessment of their ability to pay.

Did you know that the much talked about BNPL is in the middle of a revolution?


* KYC :The Know Your Client or Know Your Customer : (KYC) process is a standard in the investment industry. It ensures investment advisors have detailed information about their clients’ risk tolerance, investment knowledge, and financial position.


Source ▶️ Conference : “Les nouvelles frontières du paiement fractionné” by Finance innovation and Mind.