The concept, fundamentally a form of short-term financing, allows customers to pay for products in installments with low or zero interest. Loans are conducted on an individual payment basis, and credit checks are almost instantaneous, providing a cheaper and easier alternative to a credit card. Accounting for a 3% market share of the global domestic e-commerce payments, investment into the sector is prolific. The global leader, Klarna, alone has benefited from over 2.6bn EUR since 2014, and funding into the industry reached $11bn in 2021. Between 2018-2020, BNPL transaction value grew by 292%, and many are predicting a continued rise in market share, with reports predicting it to reach 11% within Europe by 2025. In the Netherlands, BNPL company In3 has been a part of this growth and is now set to expand into other markets, approaching the BNPL model that doesn’t quite fit the typical mold.
Younger generations, on average, have been found to use the service for cheaper items, the average purchase of Gen Z customers amounting to under $100. At In3, the payments tend to be for higher-end, more expensive items, indicating the older consumer. Many customers turn to BNPL because of the financial flexibility it offers without the need for expensive and time-consuming credit checks. This doesn’t come without its downsides. In3 offers their services online and in-store of selected merchants, where they are planning to expand their service offering, working with two of the largest service providers in Europe for in-store payments. These expansion plans come when the company has secured $11.1 million from Finch Capital to build out the technology platform and improve its customer satisfaction rating, which is currently at 9.3/10.