The Buy Now Pay Later (BNPL) market is currently a £2.7 billion market in the UK, as per a review by the Financial Conduct Authority.
While Klarna and Afterpay are credited for pioneering the BNPL trend, London-based Zilch is trying to define the sector in the UK. It also recently passed its 1 million customer milestone.
The company’s CEO and founder, Philip Belamant, reveals more about the company, it’s future plans and more.
Zilch just announced its 1 millionth customer, which is a notable milestone for the company, that exited beta 13 months ago. The startup shows between 2-5X year-on-year growth rate over its industry peers, including its rivals in the US. Zilch also recently surpassed $140M in sales.
“Traditional credit cards come with limits that aren’t linked to a customer’s ability to repay, in fact, the model incentivises providers to facilitate borrowing that leads to interest charges and late payment fees,” says Belamant. “At Zilch, our BNPL model only works if customers are able to repay what they borrow. We’ve built a completely transparent alternative in consumer credit around structured repayment plans, zero interest and no hidden fees.”
Additionally, diverging from the credit card models, which monetise late fees and interest, Zilch makes fixed fees per transaction from the retailer including affiliate commissions and advertising. This means that the company makes better money when their customers pay on time and it takes steps such as personalised lending caps and proactive repayment reminders to help customers with affordability.
Recent rumours suggest that some established fintechs such as Monzo and Revolut are planning to enter the BNPL segment. If this comes to pass, with new players, the space is bound to get competitive. However, Zilch founder believes that new players rumoured to enter the BNPL space only signifies this segment’s continued growth.
“As new household brands join BNPL, the likes of Paypal, Square, Revolut or Monzo will quickly find simple brand recognition alone or division of payments by 3 or 4 isn’t enough to inspire consumer confidence. What matters is how you make BNPL a product, rather than just an add-on feature to a bank card or app,” Belamant notes.
The startup also welcomes the possible healthy rivalry that may arise from new players entering the sector. Adding to it, while the new competitors might come up with custom solutions, Zilch is merchant agnostic and enables its customers to shop anywhere Mastercard is accepted. We’re also one of the only BNPL providers to use Open Banking alongside soft credit checks, which have no impact on credit rating.
Zilch also acquired NepFin in the US and it is now a tech-enabled direct lender with a banking license. “we’re on a fast-track to launch in the US market early next year. NepFin founder Albert Periu is now our CEO in the US, a huge asset to our plans to launch and scale quickly across the market.,” Belamant concludes.