Zopa enters the BNPL game

It has been a tumultuous few weeks for the ‘buy now, pay later’ (BNPL) sector.

But alongside layoffs, slashed valuations and uncertainty, new BNPLs continue to launch, from stealth startups to Apple Pay Later, and now Zopa.

The digital bank is the latest to jump on the UK’s £6bn BNPL bandwagon, but with the aim of doing things a bit differently.

With an emphasis on “transparency” and “customer protection”, the company is hoping to differentiate itself from other BNPLs out there by bringing forth a suite of fully regulated products.

The BNPL service will be offered on larger purchases (£250-£30,000) that might typically take customers months or years to save for.

With the data proving that BNPL shows no signs of slowing down, and with the cost-of-living crisis only deepening, it is clear the demand for the service is not going away.

“Against a backdrop of global financial uncertainty Zopa is entering the buy-now-pay-later space to make instant, yet responsible lending decisions with products that are sustainable and fit for purpose,” Zopa chief commercial officer Tim Waterman said.

“Zopa is ushering in the era of BNPL 2.0, an evolution of BNPL that is regulated.”

The bank will roll out the offering in a staggered approach, first with BNPL retail finance for merchants through B2BC partnerships, and then to a consumer offering once new regulation has been implemented.

Zopa has said it will only offer affordable credit by running credit checks and affordability tests for all its customers and will also offer tools to help customers pay down their debt.

“We combine the seamless customer journeys and best-in-class digital UX offered by traditional BNPL players alongside the ability to underwrite longer, larger loans in a way that fully meets regulatory requirements,” Waterman added. 

The latest offering for the digital bank continues a successful year for the company. 

It recently launched a new range of employee benefits, including up to 120 days of work from abroad, the most out there at the moment.

Zopa also hit profitability in April, just 21 months after getting its banking licence, has raised $500m and surpassed £1.5bn in loans with c.250,000 credit cards issued.