How Banks and Fintechs Can Capture More ‘Micro-Moments’ with Post-Purchase BNPL

Galileo Financial Technologies’ expansion of its Buy Now, Pay Later (BNPL) offerings to include a new post-purchase installment option for debit and credit accounts gives banks and fintechs a powerful tool to better serve their customers’ needs, drive new revenue streams and provide key differentiation to stand out from the competition, Galileo Chief Product Officer David Feuer explained in a recent interview with PYMNTS. 

Differentiation opportunity and key customer benefits 

While most existing BNPL services are designed around pre-purchase offers presented within the shopping or checkout flow, post-purchase BNPL enables banks and fintechs to leverage the well-documented utility of BNPL at a whole new inflection point–or “micro-moment”–in the customer journey, Feuer noted during a fireside chat with PYMNTS. 

“It’s about being able to capture that micro-moment when a user looks at their bill and can decide ‘Do I want this charge to come out of my bank account, or do I want this charge to be paid for differently?’” said Feuer, adding that post-purchase BNPL currently is “not really a crowded space” in the market at large. 

Why Banks Shouldn’t Wait on Buy Now, Pay Later Services

And post-purchase BNPL isn’t just different from its pre-purchase cousin; it offers some key unique benefits, the Galileo product head noted. 

For one, the option to break up an already-completed purchase into installment payments is highly relevant for consumers–particularly younger demographics–who are seeking flexibility around spending as a way to better manage their financial lives.

“We’re seeing this change in spending habits, where consumers are being more cognizant about their purchases, and trying to find a transparent structure around budgeting and purchasing,” said Feuer. Against this backdrop, enabling a consumer to decide how to pay for a given purchase within the context of an entire billing period’s worth of spending offers a clearer picture of the overall financial impact of that purchase, and empowers consumers to make more informed decisions about their financial health and goals, he noted. 

A bridge into lending for non-banks 

Along with helping a provider stand out from the crowd by offering differentiated benefits to consumers, post-purchase BNPL also can serve as a streamlined entry path into the credit and lending space for fintechs and other providers that previously only offered deposit accounts and debit and want to experiment lending on a limited scale, but aren’t yet ready to jump into the space all at once, Feuer observed. 

Buy Now Pay Later - The Way it Should Be for Consumers

That’s because post-purchase BNPL, when applied to a conventional debit account, transforms debit into a dynamic financial tool, offering customers the flexibility to responsibly manage payments, while opening a new revenue stream to the provider in the form of installment fees tied to those payments. 

“There are a lot of fintechs that want to get into lending but can’t [all at once], because lending tends to be highly complex, with all of these different pieces around origination, management and security,” noted Feuer. “So being able to get into lending without having to become a full-fledged lending provider, by shipping one or two lending products, like post-purchase BNPL, is a great way for providers to understand what it means to be a lender… and what the revenue opportunity is there.”

Contact us to learn how your bank or fintech can leverage the power of post-purchase BNPL.