What: The online event evaluates the future of ‘buy now, pay later’ solutions.

Why is it important: The rise of ‘buy now, pay later’ services has changed how people shop online. Within a few years, these start-ups have gone from virtually unknown to an integral part of e-commerce, opening up the concepts of credit lines and instalment plans to millions of consumers.

Attendees: Cathaleen Chen, Correspondent at BoF, Albert Saniger, Founder & CEO at Nate, Nathan Romano, Co-Founder at Onia.

Moderator: Brian Baskin, Deputy Editor at BoF.

Nate is a universal shopping app which navigates websites in the same way humans do. It understands web code and decides where to click and what to fill out. Share an item with Nate from any website, and tap buy. Nate launched a BNPL solution on the app.

Onia is a swimwear company. Women from 20 to 35 year-old are using Klarna, the BNPL option offered on the website. Klarna is mostly used for purchases under USD 100. The company doesn’t push customers to pay with instalment plans and doesn’t advertise about them. For a retailer, Onia confirms BNPL solutions are more expensive than credit card solutions, but the process is seamless comparing to archaic bank process. Klarna services, reporting and dashboards are very clear and efficient compared to what banks and credit cards companies are offering.

BNPL to grow bigger 

While BNPL solutions will develop even more in the future and become a regular payment method, participants all agree that they won’t replace credit cards even though younger generations don’t want to own one anymore.

The payment solution is already everywhere online and will develop more and more in stores. Afterpay has a set a partnership with Simon Property Group to develop BNPL solutions in its malls and stores. For retailers, it will also be an opportunity to offer a new version of their store credit card.

Through department stores offering BNPL options, luxury is also made accessible to younger customers in an unprecedented way but luxury companies are still reluctant to offer such payment solutions even considering the business opportunity they represent. BNPL will develop more and more in the luxury area as company won’t have any other choice.

Fintechs have more ambitions than offering BNPL solutions. For instance, Klarna is now a real bank in Europe. It’s fair to ask what those companies will become in the future: new Visa companies or new JP Morgan or Chase banks? Banks have data but they don’t have the tech mindset to develop innovative solutions: while they merge with fintechs?

Regulation is coming

Klarna’s app is designed to attract younger customers (it’s pink, its gamified…). But teenagers and young customers don’t understand the late payment and the potential fees that might occur. In that sense, more regulation is coming to protect immature customers. More regulation will also come to protect privacy.

Payments will be all digitalised

The future of payment is digital with no more in-store cash registers needed in the future (payments going through sales associates phones and tablets. This will be an opportunity for retailers to rethink stores as it will save space to be used in a better way.