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What Happens When Buy Now, Pay Later Meets Brick-and-Mortar?

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Buy now, pay later, a concept introduced in the ’90s, has since undergone a digital transformation for consumers across the globe.

Klarna, Afterpay, and Affirm are the few of many that offer consumers a buy now, pay later option for everyday purchases online.

But what about brick-and-mortar purchases?

This is where Arad Levertov, CEO and co-founder of Sunbit, saw an opportunity to disrupt the buy now, pay later space, and did so in a way that encouraged strong relationships with consumers.

In this episode, we discuss how Sunbit addresses:

  • The need for brick-and-mortar buy now, pay later options
  • Very competitive APR rates and payment plans
  • How Sunbit has built a loyal consumer base

A New Buy Now, Pay Later Offering

Sunbit was founded by Arad Levertov, Ornit Dweck-Maizel, Tamir Hazan, and Tal Riesenfeld to solve a problem that has since been exacerbated due to COVID-19.

Most Americans do not have an emergency fund to deal with unexpected expenses.

This leaves families in a precarious situation if there were to be an emergency such as a car breaking down or unplanned medical care.

These complex, unexpected costs can range greatly from less than $100’s to north of $1,000’s and with no emergency fund, most Americans are left with one option:

Credit Cards. 

While this can be a way to afford these expenses in the short term, if credit cards aren’t paid in full, consumers may be subjected to incredibly high APR fees.

”60% of what people spend is on what they need, is not what they want.” – Arad Levertov

Sunbit gives consumers another option that is simple, transparent, and offers better APR rates when compared to credit cards.

More importantly, it gives consumers a chance to make low interest, minimal payments each month for needed expenses.

What Sunbit has found is, a majority of consumers initially need less than $1,000 upfront for emergency needs and are then able to afford $50, $60, or $70 a month to pay that amount off.

Consumer Benefits

Historically, credit card companies use technology that forces them to pull a hard credit inquiry for things such as applying for a credit card, loan, or mortgage.

These hard inquiries negatively impact your credit score and often last 2 years.

An alternative for companies such as Sunbit, is what we call a soft credit inquiry. Soft inquiries are traditionally used for things such as prequalification, credit scores, or background checks.

The difference is soft credit inquiries do not impact your credit! For you and Sunbit, this makes the process mutually beneficial since there is no risk to apply.

“There is no doubt that in the US and in many other countries, buy now pay later will be one of the payment methods that people will use on a day to day basis.” — Arad Levertov

Here are 3 advantages to using a buy now, pay later model compared to a credit card:

  • Lower APR Rates

Buy now, pay later companies such as Affirm, Sunbit, and Klarna offer annual percentage rates as low as 0% for consumers. This is unheard of in the credit card industry unless you pay off your whole bill in the pay period it was purchased.

  • Stress-Free Applications

The process takes less than 30 seconds and is as simple as swiping your Driver’s License, entering a Phone and Email, and agreeing to Sunbit’s soft credit pull.  Over 90% of applicants are approved!

  • Transparency

With the fine print clear and upfront, you are in control of what you pay, when you pay it, and how. Sunbit offers easy tools to manage your plan, adjust payments, view activity, or pay off early.

With this comprehensive approach, Sunbit works with you in times of need.

“Buy now, pay later should be for things that you need, not things that you want.” – Brady Burkett

Merchant Benefits

Merchants have just as large of an incentive as consumers when thinking about payment alternatives such as a third party buy now, pay later offering such as Sunbit.

First, with fewer people coming in for services during COVID, there needs to be even more reason to stand out from your competition. This helps during and even after when consumers

Think about it…

Mechanics, doctors offices, etc typically don’t have a set price for their services due to the fact a specialist needs to dive deeper into the problem areas before offering a solution.

This leaves consumers walking in anxiety having to think about what their final bill might be and how it will affect their current financial situation.

By having Sunbit available to consumers, they have more of an incentive to come into their mechanic, doctors office, etc because they know there is a safety net in case the bill comes out higher than they would have expected.

It’s a win-win.

To ensure that you never miss an episode of Payments Innovation, subscribe on Apple PodcastsSpotify, or here and don’t forget to check out our YouTube!

Until next time!

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