DivideBuy’s Jo Balsamo

PCR’s Dec-Jan Big Interview with DivideBuy’s Jo Balsamo on Buy now pay later incentives

DivideBuy’s Chief Marketing Officer, Jo Balsamo tells PCR about how DivideBuy is offering greater payment versatility with Buy now pay later incentives to stimulate consumer spend post COVID-19.

Buy now pay later (BNPL) provider, DivideBuy, has secured a £300 million lending facility, Michelle Winny, Editor or PCR speaks with DivideBuy’s Chief Marketing Officer, Jo Balsamo about how the company is on track to it hit its c£175 million in Gross Merchandise Value (GMV) target by the end of 2021 and how the interest free credit provider will use funding to work with retailer partners to increase conversion rates at a time of immense opportunity for ecommerce. Here’s what Jo had to say.

I understand DivideBuy is on track to hit c£175 million in Gross Merchandise Value (GMV) by the end of 2021, please could you explain how the company has achieved this and what it means to them?
Since our establishment in 2014, DivideBuy has grown quickly, because our responsible lending solutions are proving to be a big hit with retailers and their customers. We are proud of our flexible interest free solution, because it gives retailers the choice to increase the range of products to offer, whilst providing consumers with more flexible and manageable payment solutions.

Increasingly, consumers want the option of more flexible payment solutions, instead of having to make large up-front payments for the items they want. At the same time, many of our retailer partners had never used an installment-based payments solution before. Not only are they finding that customers love the flexibility of interest free credit, but retailers also get the benefit of higher checkout conversions and higher basket sizes. It’s a win-win for consumers and retailers.

We will aim to have achieved our GMV through a series of activities from retailer acquisition, consumer adoption and retailer retention.

Please could you explain how the company will use funding to work with retailer partners to increase conversion rates?
The £300 million funding we recently announced will accelerate our plans in two key areas – enhancing and expanding our technology platform, and growing our retailer network. DivideBuy is already riding a massive growth wave, and this investment will bring our solutions to a much wider audience of both retailers and consumers, both in the UK and internationally.

The demand for our solutions shows us that there is a huge untapped market, especially in the Tier 1 and Tier 2 retailer sectors. This investment will give us the capacity to serve those markets, and across many retail verticals. To do that, we’ll be adding more functionality to our technology-centric offering, rich lending data and underwriting engine.

Having grown so quickly, we’ll also be expanding our C-suite and hiring more people, and we’ve already made some key strategic hires to support our expansion.

Overall, with this funding and with the successful strategy we’ve been pursuing, we are confident with our conversion rates as they are higher than industry standards. This allows retailers to onboard many more customers. Ideally, we want to continue to build a strong retailer base, giving consumers more choice to buy more goods and spread the cost of terms that make their purchases affordable.

Please could you advise of the current challenges and proposed solutions to manage online payments and encourage increased consumer spend?
The current challenges we see, are that online shoppers have multiple short-term payment solutions when it comes to BNPL. Our solution is less rigid because most of our competitors offer repayment terms up to three or four months maximum, which can impact consumer credit worthiness.

At DivideBuy, we give consumers the option to choose the term length of their credit agreement up to 12 months. This allows consumers to make repayments even more affordable by spreading them out over a longer term. This also allows them to access larger-value items that they would have to save up for over a longer time period.

To be clear, we don’t encourage consumers to spend more. Our solution and its affordability checks and flexibility means that consumers can source products with affordable monthly payments, with no hidden fees or complex sign-up processes.

At the same time, retailers can offer customers a wider choice of payment options and increase average basket values, because the customer has a clear view of how much they’ll repay. Consumers can check their credit worthiness and repayment options before they reach the checkout – and all without impacting their overall credit score. Customers also get added flexibility through the option to change a repayment date online, helping them to take control of their finances.

I understand the company was ranked first place on Deloitte’s UK Technology Fast 50 2020 list, what does this means to the company?
Ranking first on the Deloitte 2020 Technology Fast 50 list was a huge achievement for us. We’re a young company established in the north of England, and this demonstrates that dynamic fintech innovation, company growth and investment can come from businesses outside of London.

For us, it means that we can attract local talents and work with local partners to create great products and services.

Please could you explain a bit more about the interest free credit POS finance market and how it is being driven by technologies, like DivideBuy’s?
The interest free credit POS finance market was worth nearly £10 billion in 2020, and is estimated to be worth £27 billion by 2024. POS and in particular BNPL is on a strong growth trajectory, but it only represents around 3% of the ecommerce market globally and 1% of the UK credit market.

The technology is being driven by consumer demand for different ways to pay for goods and services, rather than the traditional method such as credit cards. That’s why we’re seeing new market entrants offering POS finance solutions at the checkout.

DivideBuy’s solution can be easily integrated at retailer checkouts through an ecommerce plugin, and works with shopping cart functionalities such as Shopify, Magento, WooCommerce and Craft Commerce. Our technology platform offers a fast 60-second application process and an immediate credit approval decision based on each customer’s individual circumstances.

How many retailers does the company currently serve and how does this impact the company’s bottom line?
Currently, DivideBuy has over 500,000 account-holders, and over 500 retailers are offering DivideBuy as a payment option at their online checkouts alongside the likes of PayPal and Amazon Pay. We’re adding more retailers every month across more industry sectors, and this trend is only set to increase over 2022 and beyond.

Do buy now pay later transactions really create easier and more accessible payment options for customers or does it encourage debt?
In short, with responsible lending based on responsible spending, BNPL does create an easier way to transact.

When first-time customers use DivideBuy, all they need to complete is a short sign-up form, which asks for basic information. DivideBuy’s automated credit check system uses this information to present the consumer with personalised payment deals, and soft search credit checks that offer no risk to the customer’s credit score. All the information on payment installment times and figures is customer-facing, with no hidden fees, so that the consumer knows exactly what they are paying.

Lenders should be checking credit worthiness before approving a request for credit and clearly explaining their terms and conditions of sale to ensure that the consumer does not get into debt.

How is the company revolutionising the POS finance sector?
Traditional lending solutions have often come with high interest charges and hidden fees, and work in the interest of the lender but not the customer. Convoluted lending processes have deterred consumers from signing up, and retailers lose out on sales due to the lack of an affordable and flexible payment option at the checkout.

Our ethos is all about bringing customer-friendly lending technology that offers installment-based payments into the mainstream. DivideBuy occupies a versitile position in the BNPL sector because we’re both the lender and tech platform provider. Our platform is helping retailers onboard new customers in-store and online effortlessly, with real-time credit checks and approvals. Our success over the last few years shows that we’re generating increased sales and higher basket values for retailers, and extending more affordable and flexible payment solutions for consumers.

The flexibility of DivideBuy’s technology ensures each customer is treated as an individual, with no long forms for customers to fill out or complicated small print. Retailers can onboard customers instantly, providing a much more intuitive customer experience with tailored payment plans based on the customer’s profile. Our platform also allows the generation of marketing insights through first-party customer data analysis.

This helps retailers to boost sales, improve cash flow, and support responsible lending for consumers, with full visibility over the entire lending process.

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