Scalapay CEO Rejects BNPL’s Super App Strategy

Competition in the buy now, pay later (BNPL) space has intensified in recent years as established players compete with new entrants vying for a slice of the growing pie.

And in Europe, where customers are quite conservative when it comes to credit, focusing on smaller baskets can be the differentiator to get ahead of local and regional competitors who are primarily focused on larger purchases.

“Most retailers in Italy, France and Spain were quite skeptical and thought their customers wouldn’t need [BNPL] for 30 to 50 euros of products, but we were able to prove that it was quite useful. And once they activated Scalapay, they saw 10-20% of customers adopt it immediately,” Simone Mancini, CEO of Milan-based BNPL Scalapay, told PYMNTS in an interview.

Read more: BNPL’s European provider Scalapay raises nearly $500 million

And sticking to that strategy seems to have served them well. The Italian unicorn company, which also has operations in France, Spain, Portugal and Germany, has raised nearly $730 million in just two years of launch, part of which was obtained from the Italian postal service Poste Italiane, the largest service infrastructure network in the country. , providing financial, payment and digital services to households, businesses and governments.

Read also: Italian BNPL Unicorn Scalapay obtains $27 million from Poste Italiane

Overall, he said they have refrained from adopting a super app strategy like some of the big BNPL players have done because it isolates traders who need help navigating the market. world of online markets.

“Philosophy, when it comes to some of the bigger players, we differ in that we don’t want to disintermediate the trader. We are not here to create a great application or to develop our own market. We are really interested in trying to help merchants, [and] there are a lot of opportunities to improve that,” he noted.

Building a sustainable lifestyle

To further ease the impact of transactions on customers’ monthly budget, Scalapay has partnered with UK-based next-gen FinTech Twig to allow customers to resell fashion and electronics products they have previously purchased. via Scalapay and get paid instantly by Twig.

Related News: BNPL Scalapay Platform Partners with FinTech Twig for Sustainable Shopping

“All of a sudden, people are buying a bag or a dress and instantly reselling it for a fixed price determined by Twig using an algorithm – it’s exciting,” he remarked.

For Gen Z and Millennial consumers targeted by Twig, making a purchase with the guarantee that they can instantly resell at any time makes the shopping experience even more “enjoyable”, he said, and allows them to focus on building a sustainable lifestyle, which is a growing trend in the region among this customer group.

Since BNPL’s penetration remains quite low in southern Europe, Mancini said there are many untapped opportunities in the various markets where they operate. Against this backdrop, the company recently launched travel as a vertical and plans to expand its in-store QR code payment functionality with cards.

Earlier this year, the EU-focused company also launched Magic, a payment solution to help European merchants transform their entire payment experience, a move it says is part of their core strategy. aimed at “empowering merchants and helping them deliver amazing services, [frictionless] customer experiences.

No obligation to sell, for now

As more consumers embrace the option of paying for their retail purchases in instalments, a consolidation trend has moved beyond the BNPL space, with Australia’s Zip recently acquiring US lender Sezzle in a deal valued at $352 million.

Related: Sezzle, Zip Deal shows BNPL’s consolidation trend could continue in 2022

Mancini confirmed to PYMNTS that they have been approached by all major European BNPL players with proposals, especially given the attractiveness of European markets, which are home to some of the biggest fashion and cosmetics brands in the world.

But being at a very early stage of the adoption curve means there are plenty of untapped opportunities in the BNPL space, and Scalapay will look to explore them on its own, at least for now.

“I think payment and the future of e-commerce is very exciting, and being able to raise a lot of funds like we have done puts us in a very privileged position where we can continue to implement our vision for years to come. come in. So we have no obligation to sell in the short term,” Mancini said.

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.

About Sandra A. Powell

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