BNPL market is now growing by leaps and bounds and investors keep showing that they are really interested in it. According to Grand View Research, by 2028 market size is expected to reach 20.40 billion USD.
How BNPL solutions work?
BNPL (Buy now, pay later) basic scenario is the following: a client purchases goods on the web-site or in the store and pays in installments over the next 2-12 months. A wide range of goods can be purchased this way, ranging from basic consumer goods, such as food, clothes or children’s goods up to brand-name goods and jewellery.
Despite a slight marginality reduction, retailer has the opportunity to push up the sales substantially as well as to improve access to the goods offered. The average check and resale chances also increase immensely.
BNPL solutions are a great alternative to credit cards, which allow customers to make a purchase and pay for it in instalments later. Revo Technologies (the owner of Mokka brand) is the largest BNPL company, operating in Russia and Central Europe since 2012. Today the experts shared their experience of cooperation with JuicyScore, one of the leading risk management and anti-fraud solutions provider.
According to Sergei Bogdanov, Chief Risk Officer at Revo Technologies, “We chose JuicyScore, because it had already showed a great performance on the market and highly experienced team helped us to adapt the data to our processes and product specific features.”
How easy was the integration?
Integration was set up in two stages. We put the finishing touches to the widget, where we also included JavaScript from JuicyScore. Via this widget we managed to collect information necessary for JuicyScore service operation right on our iframes, integrated with retailer’s platform, at the moment of making a purchase. For Mokka mobile application JuicyScore SDK integration was set up in order to collect primary device and behavioural data. In web and mobile channels this information is sent to JuicyScore API and we get the response at once - statistics on device and user behaviour.
What results have been achieved?
According to Sergei Bogdanov, JuicyScore data helps to achieve significant savings. For instance, in 2021 we managed to save 500 thousand USD. JuicyScore allows to cut off 2-3% of application flow with average risk of 30-40%.
JuicyScore helps to mitigate operational risks really well, in this regard we use stop factors related to frequency characteristics. For example, the number of applications or requests from the same device or virtual user with a certain time periodization, which had been observed previously as well as the variables, verifying the probability of application sending from foreign IP addresses (by verification of the real IP address and/or DNS server location), - it considerably helps to mitigate fraud risk and the number of defaulted debts.
Apart from that, markers of additional verification are widely used. For example, the marker of data manipulation (email login or phone number in reduced format) in comparison to the previous application, sent from the same device. The use of suspicious plugins and specific browser settings installed on the device also refers to additional verification and applied in the model.
Some variables allow to set up a score value for conservative fraud policies or more aggressive ones in terms of risk. Besides, those variables help in such cases when credit bureau data is not enough or data provided is rather low quality.
On addition to the use case provided, we would also like to highlight a few BNPL trends that characterise the market.
What BNPL-trends are going to affect business in the nearest future?
Despite that fact that BNPL-platforms currently occupy only 2 percent of lending market, it is quite obvious that BNPL industry will continue to grow, since the need in goods is essential.
In the wake of e-commerce grow (in 2021 market grew by 32% in Russia and exceeded 4 trillion rubles), the need for BNPL solution also grows immensely. One more factor, which affects the growth is the increasing popularity of such services among the young people, who sometimes do not have access to alternative banking solutions due to insufficient credit history.
On the one hand, BNPL market will face rather tough competition, on the other hand, leading companies and key players, which pay great attention to mobile application development and tools for payments tracking designing as well as provide customers with new high-quality solutions for b2c and b2b, are going to win the market in the long run.
Juicy Team continues to maintain a high pace of development and delight our customers and partners with new product functionality, for one can ensure high competitiveness and business safety only through efficient and hard work in a dynamic digital world.