Deloitte and Mambu have identified the five steps merchants and fintech need to embrace in building a successful BNPL offering
The guide released by Deloitte and Mambu identifies five core building blocks for businesses looking to develop a BNPL solution in an increasingly competitive environment:
- Value proposition – defining and understanding what merchants and customers need and developing a model to solve their key pain points
- Technology and data – developing a tech stack with best-of-breed partners to enable real-time decisioning as well as the creation of next-generation solutions that deliver distinctive customer experiences
- Risk and compliance – designing a risk framework that provides a competitive edge, from in-built fraud detection and management to defining the risk appetite, model and strategy
- Skills and capabilities – investing in specialised talent in critical areas to compliment businesses’ existing teams as well as build their brand and differentiate their product in the market
- Go-to-market – bundling the offering within a businesses’ portfolio and bringing the minimum viable product to life
The report comes amid booming demand for BNPL services, with the market projected to be worth $3.98 trillion by 2030 – growing at a CAGR of 45.7%.
Consumer demand for convenience and affordability is one of three factors driving this growth according to the report, with recent data from Deloitte showing that 56% of consumers cite the ability to test a product before making a payment as a key driver for using BNPL.
Other growth factors include widespread merchant adoption, as vendors look to reap BNPL benefits, such as increased sales conversions and average order sizes, as well as accelerated market traction during the pandemic.
According to Worldpay data, BNPL accounted for 2.9% of global e-commerce in 2020, and is expected to reach 5.3% by 2025.
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