UK-based Zilch is bringing its buy now, pay later (BNPL) 2.0 business model to the US; with a headquarters in Miami and 150,000 rep-registered customers.
Having already engaged around two million customers since launching in the UK some 18 months ago, Zilch is well-positioned to enter the US market with its BNPL 2.0 model effectively. During that time, Zilch raised $400million in debt and equity from the ikes of Goldman Sachs, setting its current valuation at its last Series C funding round at just over $2billion.
What is BNPL 2.0?
Zilch’s BNPL 2.0 business model is similar to that of a more traditional model, where customers make purchases as needed, and pay for them at a future date. However, what Zilch describes as the ‘next-generation’ of this technology incorporates a few additional benefits to those using the service
The model imposes no fees or late charges along with two per cent cashback rewards, an element that Philip Belamant, the company’s CEO and co-founder, feels strongly about: “In 2020, US consumers paid $12billion in fees and late charges to credit cards, which we believe is unacceptable and fundamentally misaligned with the interests of consumers.
“They are being set up to fail and need more flexibility, especially during a cost of living crisis and a time of surging inflation, to pay for goods and services how and when they want – with a system that avoids late payments and unnecessary, onerous fees.”
The model facilitates a real-time view of a consumer’s financial health by utilising both open banking technology and soft credit checks, which sit beside Zilch’s own proprietary behavioural data. That enables Zilch to create a 360-degree picture of a customer’s affordability profile, generating accurate, individualised spending recommendations.
As with regular BNPL systems, Zilch customers can pay over six weeks, in four instalments, or in one lump sum. However, the 2.0 model indicated that customers who pay in full will benefit from deals and cash back. Through its partnership with Mastercard, the platform will be accessible to 38.7 million retailers globally.
“Our experience in the UK, and the survey we conducted here in the US, make it clear that US consumers want much more from BNPL providers, what we call BNPL 2.0 – which removes what consumers dislike (lack of ubiquity/fees and/or late charges),” continues Belamant. “Zilch also gives what consumers say they value – cash back, which can be used to discount larger purchases.”
Concurrent with its launch, Zilch, is partnering with Experian to pioneer reciprocal reporting of payment plans to the credit reporting agency’s (CRA’s) data set. This is designed to help ensure consumers’ financial health by providing greater transparency and accuracy while rewarding customers for their responsible behaviour allowing them to build credit scores.
To support its expansion within the US, Zilch has established a headquarters in Miami, Florida. Operations are to be led by Zilch’s US CEO Albert Periu.
Periu believes the US market for the company’s services could reach as many as 125 million people, and plans to scale the company accordingly, with 100 US-based employees expected to be brought in within the next year.
“We’re thrilled to be fully operational from Zilch’s US headquarters in Miami, as the city’s entrepreneurial spirit and diversity of talent serve as an excellent home for the company’s growth in the US,“ comments Periu.
Currently, Zilch’s Miami office employs teams across various corporate departments including Operations, Engineering, Marketing, Design and HR.