On the face of it, the Buy Now, Pay Later concept is incredibly simple. But in reality, there’s much more to it than meets the eye and the scope for innovation is vast, as Marqeta partner Twisto is demonstrating.
In its newest product iteration, the Czech payments pioneer is delivering functionality that will increase its customers’ scope to make more big-ticket purchases without hampering their day-to-day spending needs. Marqeta caught up with Head of Product Pavel Prucek and asked him about the latest turn in Twisto’s journey.
Can you tell us about the motivation behind your new Buy Now, Pay Later feature?
“When thinking about this, it’s perhaps worth taking a look at our existing offering. Since we launched in 2013, new users of the app have had the option of paying in full at the point of sale or deferring payment for 14 days. Once a customer is fully onboarded with an account, the time limit is extended to 45 days. This is what we call our ‘revolving product’ and it’s targeted at typical weekly purchases such as clothes and restaurant bills.
“However, we’d spotted that people were coming close to their spending limits and this was preventing them from making larger purchases, particularly during COVID, which has really prompted people to broaden the range of things they buy online. To help our users overcome this challenge, we’ve built an instalment feature that gives customers more options for how they use credit. This is very much geared towards more expensive, less frequently bought items such as mobile devices and furniture.”
So from a user journey perspective, how does this work in relation to the revolving credit card?
“Well first and foremost, the instalment feature is purposely designed not to affect users’ regular spending ability, as each customer has a preapproved overall credit limit above and beyond what they’re allowed to utilise within their revolving limit.
“When a customer identifies a large purchase need, they process a simple application in the Twisto app, deciding on an instalment plan of between 3 and 12 months, and agreeing to a set of terms. The decision is given in real time and is informed by a risk engine, which prevents spending in certain categories such as gambling or adult entertainment.
“To keep instalment purchases separate from customers’ regular revolving limit, we push the funds on to a new single-use virtual card in Google Pay or Apple Pay. This is done via Marqeta’s Tokenization as a Service (TaaS), which allows us to instantly provision a card into a digital wallet.”
It sounds like many Twisto customers will love this new feature. Are there any other benefits?
“Yes, absolutely, we’ve tapped into our membership of affiliate networks to leverage favourable deals with 50 well-known merchants, and this has allowed us to offer a ‘pay in three interest-free installments’ option to our users. Translated this means customers can buy items from any of these merchants using the instalment product and enjoy interest-free credit.
“Over the coming months, we’re going to be proactively communicating all of this to our customers to help them get the most out of our app and its features.”
To find out more about Twisto and how its app works, simply visit twistopay.com. Marqeta has also produced this brochure on Tokenization as a Service, which offers a seamless route to creating a virtual card proposition for both new and established financial institutions.
*The views and opinions expressed in this blog by a third party are those of the third party and do not necessarily reflect the views or opinions of Marqeta.