Bankloch

There is a clear trend with the   young generation to be averse of credit cards . They have seen from their parents what a too high usage of credit cards can lead to and at the same time feel that credit cards are complex and lack transparency. The   rise of BNPL   (= Buy Now Pay Later - see my blog " Buy Now Pay Later - A credit in disguise?   -   https://bankloch.blogspot.com/2021/07/buy-now-pay-later-credit-in-disguise.html" ), is a clear consequence of that, i.e. these companies provide a different means to the same end (buying a good on credit), but with a better user experience and more transparency (or at least the feeling of more transparency). As a result of this shift, a potential   gap   is rising on all   loyalty and reward programs offered by most (credit) card schemes . These advantages are a huge market, although these rewards are often more the perception of getting value than receiving actual value (as very few people actually consume those discounts/rewards)

In my blog " Buy Now Pay Later - A credit in disguise ? ( https://bankloch.blogspot.com/2021/07/buy-now-pay-later-credit-in-disguise.html ) I raised already some concerns about the Buy Now Pay Later movement. While at first sight it seems indeed a more transparent and more user-friendly solution than payments via a credit card, in reality it might be even more dangerous to push people into debt. In a counter-reaction a few Fintech start-ups (like Accrue Savings, Sympl, Monkee…​) have raised capital to initiate a countermovement called   "Save Now Buy Later" (SNBL) . This movement aims to provide the same   user-friendly embedded (payment) experience   as BNPL, but without pushing people into credit. Instead it stimulates people to save for something they have seen at a merchant and buy it once the required amount has been saved (so buy it in the future). Obviously this is not a replacement for BNPL, but rather a compliment to offer the best shopping experience for every

If you are not working in the payments industry, it remains a mystery why payments are such a complex domain. In its essence, it is just a debit from one account and a credit on another account, which in a digital world should be super easy to accomplish. The reality is however a whole different ball game, resulting from a complex web of dozens of parties (with different - often legacy - solutions, using different protocols), which have been integrated extensively. As a result, any new innovative solution, first needs to integrate with a large amount of existing payment solutions, in order to provide a reasonable user and acceptance base. If we could switch all businesses all at once to a new solution, payments could be organized a lot easier and more efficient, but obviously this is not realistic. When we deconstruct payments to its core, you can identify following steps: Payer receives the info of   how much he needs to pay   from the payee (= recipient) Payer   initiates a payment a