Fintech
Consumers turning to Buy Now Pay Later to manage their finances amidst soaring inflation, finds RFI Global
Millions of consumers globally are now choosing Buy Now Pay Later (BNPL) services as a more responsible way to manage the cost of their online and in-store purchases according to their own cash flow, compared to alternatives like credit cards.
A new report into the attitudes and use of BNPL credit across Europe, Asia Pacific and the US, ‘The Global State of BNPL: How banks and providers can champion customer interest‘ was released today by RFI Global, the only global data and insights consultancy exclusively for financial services. It finds that rather than leading people towards a dangerous spiral of debt, BNPL is helping them to better manage cash flow by offering short-term interest-and fee-free products, thereby avoiding revolving credit card debt and bank charges.
RFI Global’s BNPL Tracker surveys over 14,000 consumers across 11 countries in Europe, Asia Pacific and the US twice a year about their attitudes towards, and use of, financial payment services such as BNPL.
What appeals to shoppers most when they choose the BNPL option at checkout (across all markets surveyed) is: no interest charges (33%), convenience (33%), improved cash flow management so that they can pay other expenses (28% globally) and helping them to budget (31%).
Consumers surveyed by RFI Global display a level of aversion to debt and do not want to buy things they cannot afford, even ranking this as one of the key reasons why they do not use BNPL. Standard Chartered’s ‘Future Money” survey[1] found that since the pandemic, people around the world were most concerned with ‘Meeting their daily expenses’ (37%). Rising inflation will further increase the efforts people make to better manage their money.
“The majority of BNPL users are millennials who want to manage their money more efficiently and avoid debt,” said Kate Wilson, Global Head of Consumer Credit, Deposits and Payments at RFI Global. “Indeed, our research suggests that most BNPL users are averse to debt. They want to buy what they can afford and are aware of the dangers and cost of credit.
“BNPL’s simple credit model provides a convenient way for them to spread the cost of some purchases over several weeks or months in equal payments, assisting with budgeting without resorting to a loan, going overdrawn or putting the expense on credit cards. They can buy what they want, when they want, and take full advantage of promotions or sale items.”
Best interests at heart but trust still to be earned
Despite BNPL’s growth, consumers trust banks more than they do the pureplay BNPL providers such as Afterpay, Clearpay, Klarna and Affirm, the RFI Global report finds. Overall they feel that the fintechs have their best interests at heart and don’t associate them with having hidden fees and charges. Satisfaction scores tend to be high with these pureplay providers, which makes it extremely likely that they’ll use the services again.
In the UK for example, consumers surveyed feel that a BNPL service offered by a bank would be more secure (36%), more widely accepted (31%), and more reliable (31%). More than half (53%) of consumers would consider a BNPL service offered by a bank extremely appealing compared to 35% who rate a dedicated third party BNPL provider the same.
“The high degree of consumer trust in banks presents an opportunity for them to launch their own services,” suggests RFI’s Wilson. “Some banks are already dipping their toes in – such as Barclays through its partnership with Amazon – and many more are considering the launch of BNPL services. To compete, banks will need to leverage their trust advantage and improve upon the focus that the fintech providers place on providing a great customer experience. They will also need to remain competitive on price and other incentives. Banks have a limited window of opportunity to do this before fintech BNPL brands win customer trust and loyalty themselves.”
Barriers for banks
However, the report highlighted some barriers for banks to overcome. In particular, the perception that a bank-offered service would be more expensive (35%), more complicated to use (24%) and would offer fewer offers and promotions (23%).
There are also worries about credit score impact and hidden fees. In France for example, 45% of consumers are worried that simply using BNPL might impact their credit scores (compared to 4% in the UK and 5% in the USA). More than a third of French respondents (37%) don’t trust themselves to make regular scheduled payments (compared 5% in the UK and 9% in the US).
Other report highlights:
- No-interest, no-fee and convenience have boosted BNPL uptake – In Australia, Canada, Mainland China, Mexico and the UK, no-fee or interest is the leading reason for using BNPL. Whereas in France, Hong Kong, India, Singapore and the USA, it is convenience that drives usage. This payment experience and ease of checkout is important to encourage repeat usage.
- Against a backdrop of soaring inflation, consumers likely to repeat use BNPL for bigger ticket items as well as household expenses – although online retail dominates BNPL purchases – particularly fashion where 1 in 5 online purchases in Australia were paid through BNPL last year – consumers are interested in using it for higher value items such as electrical goods, household appliances and furniture. Further, around a third of consumers in Australia and the UK have indicated they would use BNPL to pay for everyday expenses such as household bills (38% in Australia, 34% in the UK), groceries (37% in Australia, 29% in the UK) and petrol (27% in Australia and the UK).
- Frequent users willing to pay a fee for excellent experience – frequent users of BNPL are finding so much value in using it as a payment option that 47% of BNPL users in the UK and 49% in Australia say they would still use the provider if fees were attached to it.
- Try and buy – a third of consumers globally used BNPL because they wanted to ‘give it a try’. Trial is a strong driver of usage in more nascent BNPL markets where dedicated BNPL services have only recently emerged, in particular India (45%), Singapore (43%) and Hong Kong (40%).
- Younger consumers turning to BNPL – There is a sharp distinction for BNPL usage among millennials (aged 26-41 years) and Gen Z (aged 18-24 years). In maturing markets consumers aged 25-34 years are proving to be early adopters, with India (74%) and the US leading the way (61%). In Mainland China and India, Gen Z have flocked to BNPL with 89% and 73% of consumers under 25, respectively, using the service. In Australia, over 60% of millennials have used BNPL. Meanwhile, in Hong Kong, the greatest uptake has been among consumers aged 45-54 years.
- Asia’s baby boomers joining GenZ – Surprisingly, RFI Global research indicates that alongside Gen Z users, there is also high uptake among baby boomers across Asia who are keen to try the BNPL trend. 61% of people aged 55-64 years and 77% of people older than 65 years in Mainland China – where Ant Check Later and WeChat FenFu are the top 2 brands – compared to 63% (55-64 years) and 50% (65+ years) in India and 39% (55-64 years) and 22% (65+ years) in Singapore.
- Online dominates but in-store use is growing – globally most people are using BNPL when shopping online, but there is growing in-store use, particularly in Mainland China (over 50%) and Australia where BNPL is accepted in most stores. Creating a better in-store experience and growing awareness of acceptance for in-store will be key to further uptake for offline purchases.
Modern brands stake on influencer marketing, with 76% of users making a purchase after seeing a product on social media.The cryptocurrency industry is no exception to this trend. However, promoting crypto products through influencer marketing can be particularly challenging. Crypto influencers pose a significant risk to a brand’s reputation and ROI due to rampant scams. Approximately 80% of channels provide fake statistics, including followers counts and engagement metrics. Additionally, this niche is characterized by high CPMs, which can increase the risk of financial loss for brands.
In this article Nadia Bubennnikova, Head of agency Famesters, will explore the most important things to look for in crypto channels to find the perfect match for influencer marketing collaborations.
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Comments
There are several levels related to this point.
LEVEL 1
Analyze approximately 10 of the channel’s latest videos, looking through the comments to ensure they are not purchased from dubious sources. For example, such comments as “Yes sir, great video!”; “Thanks!”; “Love you man!”; “Quality content”, and others most certainly are bot-generated and should be avoided.
Just to compare:
LEVEL 2
Don’t rush to conclude that you’ve discovered the perfect crypto channel just because you’ve come across some logical comments that align with the video’s topic. This may seem controversial, but it’s important to dive deeper. When you encounter a channel with logical comments, ensure that they are unique and not duplicated under the description box. Some creators are smarter than just buying comments from the first link that Google shows you when you search “buy YouTube comments”. They generate topics, provide multiple examples, or upload lists of examples, all produced by AI. You can either manually review the comments or use a script to parse all the YouTube comments into an Excel file. Then, add a formula to highlight any duplicates.
LEVEL 3
It is also a must to check the names of the profiles that leave the comments: most of the bot-generated comments are easy to track: they will all have the usernames made of random symbols and numbers, random first and last name combinations, “Habibi”, etc. No profile pictures on all comments is also a red flag.
LEVEL 4
Another important factor to consider when assessing comment authenticity is the posting date. If all the comments were posted on the same day, it’s likely that the traffic was purchased.
2. Average views number per video
This is indeed one of the key metrics to consider when selecting an influencer for collaboration, regardless of the product type. What specific factors should we focus on?
First & foremost: the views dynamics on the channel. The most desirable type of YouTube channel in terms of views is one that maintains stable viewership across all of its videos. This stability serves as proof of an active and loyal audience genuinely interested in the creator’s content, unlike channels where views vary significantly from one video to another.
Many unauthentic crypto channels not only buy YouTube comments but also invest in increasing video views to create the impression of stability. So, what exactly should we look at in terms of views? Firstly, calculate the average number of views based on the ten latest videos. Then, compare this figure to the views of the most recent videos posted within the past week. If you notice that these new videos have nearly the same number of views as those posted a month or two ago, it’s a clear red flag. Typically, a YouTube channel experiences lower views on new videos, with the number increasing organically each day as the audience engages with the content. If you see a video posted just three days ago already garnering 30k views, matching the total views of older videos, it’s a sign of fraudulent traffic purchased to create the illusion of view stability.
3. Influencer’s channel statistics
The primary statistics of interest are region and demographic split, and sometimes the device types of the viewers.
LEVEL 1
When reviewing the shared statistics, the first step is to request a video screencast instead of a simple screenshot. This is because it takes more time to organically edit a video than a screenshot, making it harder to manipulate the statistics. If the creator refuses, step two (if only screenshots are provided) is to download them and check the file’s properties on your computer. Look for details such as whether it was created with Adobe Photoshop or the color profile, typically Adobe RGB, to determine if the screenshot has been edited.
LEVEL 2
After confirming the authenticity of the stats screenshot, it’s crucial to analyze the data. For instance, if you’re examining a channel conducted in Spanish with all videos filmed in the same language, it would raise concerns to find a significant audience from countries like India or Turkey. This discrepancy, where the audience doesn’t align with regions known for speaking the language, is a red flag.
If we’re considering an English-language crypto channel, it typically suggests an international audience, as English’s global use for quality educational content on niche topics like crypto. However, certain considerations apply. For instance, if an English-speaking channel shows a significant percentage of Polish viewers (15% to 30%) without any mention of the Polish language, it could indicate fake followers and views. However, if the channel’s creator is Polish, occasionally posts videos in Polish alongside English, and receives Polish comments, it’s important not to rush to conclusions.
Example of statistics
Wrapping up
These are the main factors to consider when selecting an influencer to promote your crypto product. Once you’ve launched the campaign, there are also some markers to show which creators did bring the authentic traffic and which used some tools to create the illusion of an active and engaged audience. While this may seem obvious, it’s still worth mentioning. After the video is posted, allow 5-7 days for it to accumulate a basic number of views, then check performance metrics such as views, clicks, click-through rate (CTR), signups, and conversion rate (CR) from clicks to signups.
If you overlooked some red flags when selecting crypto channels for your launch, you might find the following outcomes: channels with high views numbers and high CTRs, demonstrating the real interest of the audience, yet with remarkably low conversion rates. In the worst-case scenario, you might witness thousands of clicks resulting in zero to just a few signups. While this might suggest technical issues in other industries, in crypto campaigns it indicates that the creator engaged in the campaign not only bought fake views and comments but also link clicks. And this happens more often than you may realize.
Summing up, choosing the right crypto creator to promote your product is indeed a tricky job that requires a lot of resources to be put into the search process.
Author
Nadia Bubennikova, Head of agency at Famesters
The BIS, along with seven leading central banks and a cohort of private financial firms, has embarked on an ambitious venture known as Project Agorá.
Named after the Greek word for “marketplace,” this initiative stands at the forefront of exploring the potential of tokenisation to significantly enhance the operational efficiency of the monetary system worldwide.
Central to this pioneering project are the Bank of France (on behalf of the Eurosystem), the Bank of Japan, the Bank of Korea, the Bank of Mexico, the Swiss National Bank, the Bank of England, and the Federal Reserve Bank of New York. These institutions have joined forces under the banner of Project Agorá, in partnership with an extensive assembly of private financial entities convened by the Institute of International Finance (IIF).
At the heart of Project Agorá is the pursuit of integrating tokenised commercial bank deposits with tokenised wholesale central bank money within a unified, public-private programmable financial platform. By harnessing the advanced capabilities of smart contracts and programmability, the project aspires to unlock new transactional possibilities that were previously infeasible or impractical, thereby fostering novel opportunities that could benefit businesses and consumers alike.
The collaborative effort seeks to address and surmount a variety of structural inefficiencies that currently plague cross-border payments. These challenges include disparate legal, regulatory, and technical standards; varying operating hours and time zones; and the heightened complexity associated with conducting financial integrity checks (such as anti-money laundering and customer verification procedures), which are often redundantly executed across multiple stages of a single transaction due to the involvement of several intermediaries.
As a beacon of experimental and exploratory projects, the BIS Innovation Hub is committed to delivering public goods to the global central banking community through initiatives like Project Agorá. In line with this mission, the BIS will soon issue a call for expressions of interest from private financial institutions eager to contribute to this ground-breaking project. The IIF will facilitate the involvement of private sector participants, extending an invitation to regulated financial institutions representing each of the seven aforementioned currencies to partake in this transformative endeavour.
Source: fintech.globa
The post Central banks and the FinTech sector unite to change global payments space appeared first on HIPTHER Alerts.
TD Bank has inked a multi-year deal with Google Cloud as it looks to streamline the development and deployment of new products and services.
The deal will see the Canadian banking group integrate the vendor’s cloud services into a wider portion of its technology solutions portfolio, a move which TD expects will enable it “to respond quickly to changing customer expectations by rolling out new features, updates, or entirely new financial products at an accelerated pace”.
This marks an expansion of the already established relationship between TD Bank and Google Cloud after the group previously adopted the vendor’s Google Kubernetes Engine (GKE) for TD Securities Automated Trading (TDSAT), the Chicago-based subsidiary of its investment banking unit, TD Securities.
TDSAT uses GKE for process automation and quantitative modelling across fixed income markets, resulting in the development of a “data-driven research platform” capable of processing large research workloads in trading.
Dan Bosman, SVP and CIO of TD Securities, claims the infrastructure has so far supported TDSAT with “compute-intensive quantitative analysis” while expanding the subsidiary’s “trading volumes and portfolio size”.
TD’s new partnership with Google Cloud will see the group attempt to replicate the same level of success across its entire portfolio.
Source: fintechfutures.com
The post TD Bank inks multi-year strategic partnership with Google Cloud appeared first on HIPTHER Alerts.
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