CEO and co-founder of Sunbit, a technology company making the buying and selling experience stress-free for everyone, everywhere.

The good news is that BNPLs — buy now, pay later service providers — had a breakthrough year in 2021, by all accounts.

The not-so-good news is that when the dust of this major growth trend clears, not all of the players in this space will still be standing.

The best news is that who survives, and thrives, in the BNPL arena won’t be random. It will be based on how thoughtful and proactive leaders are in their approach to serving customers and other stakeholders.

In this article, I’ll talk through the key differentiators that will separate the best BNPLs from the rest, enabling them to create long-term value for their ecosystems, including the BNPL, the consumer and the merchant partners, as well as their employees, their shareholders and the broader world.

To be sure, there’s a lot at stake in this race. According to Forbes, BNPL purchases were projected to reach $100 billion in 2021. This is up from $24 billion in purchases in 2020 and $20 billion in 2019. This is 400% growth in a matter of two years. It’s no surprise that companies of all sizes are jockeying for positions, as BNPL inches closer to transitioning from a “nice-to-have” to a “must-have” at checkout, increasingly competing with credit cards.

Here are the guideposts that I believe will drive long-term success in this fast-growing space.

Have a consumer-first mentality without any ‘gotchas.’

BNPL brings innovation, transparency and personalization to the credit world, a world that historically made its bread and butter charging various fees and the highest interest rates possible. Aim to bake maximum transparency and flexibility into every part of the customer experience, and to follow not just the golden rule — “treat others as you would want to be treated” — but the platinum rule — “treat others as they would want you to treat them.”

Successful BNPLs will make sure there are no unpleasant surprises — at any point — during the life of the loan. That means more transparency about terms of purchase, no nickel-and-diming on product features, no origination fees or late fees, and the best rates possible, offering each individual consumer something better than what’s already in her wallet. Net promoter scores will tell the story of who is delivering here.

Be inclusive and honest.

Related to the point above, BNPLs need to genuinely want people to succeed financially, on their own terms. It’s about upholding the idea that BNPL should work for everyone, everywhere — not just higher-income earners, who largely don’t need to defer payments in the first place. That’s the inclusion part. The BNPL that can build affinity with people from all walks of life will be the BNPL that has an incredibly loyal and diverse customer base.

Be different — and aim for stickiness.

The goal shouldn’t be to jump into the most crowded section of the pool in a frenzied effort to steal share but to swim into new waters, where new opportunity lies. In many markets, financing hasn’t changed since the 1980s, and the only choices are branded or costly credit cards.

I and my team have found that bringing BNPL to needed goods and services is helping us to build ongoing relationships — ones that can be expanded over time. And frankly, the company is almost always the only player in the markets we serve.

This creates greenfield opportunities, which, when matched with world-class service and terms, is a winning formula. The BNPL companies that prove to be sticky with consumers, and merchants, will have the longest staying power, based on their ability to offer exceptional customer service, true merchant partnerships and deep industry expertise.

Merchants are more than a conduit.

You can’t use merchants as a simple gateway to customers because they, in turn, will treat you as an interchangeable BNPL partner. You want to create mutual relationships in an ecosystem where everyone is winning. Understanding their needs and goals, training them and offering ongoing support, and offering reporting on BNPL trends and information are critical strategies for ensuring you’re building relationships for life.

Create and maintain a mission-driven culture.

Even the most innovative, fast-growing BNPLs will struggle if they stumble on their internal culture. It’s about articulating an inspiring mission of helping customers across segments improve their lives and using that to guide decision making and how you treat your own employees.

Mission-driven culture has been written about elsewhere, but key components include setting a tone of respect and collaboration at the top, aiming for continuous learning and improvement, and encouraging (and acting on) ideas from every level of the organization. At Sunbit, for instance, the team is focused on eliminating financial waste. This ethos translates into every decision made, and it allows us to give money back to the people.

Those are what I see as the keys to “winning” the BNPL game. But the companies most likely to survive recognize there’s no single finish line. It’s about showing up every day excited about the mission of giving people more choices and flexibility with their purchase decisions, so they and their families can live their best lives. I hope you find that sense of purpose — and the factors that will help you live it — as compelling and inspiring as I do.

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