Voice of the Industry

The importance of regulating the Buy Now, Pay Later sector: Tinka's perspective

Monday 13 November 2023 11:41 CET | Editor: Raluca Ochiana | Voice of the industry

Diana Apakidze, Chief Growth Officer at Tinka, shares the company’s perspective on the importance of regulating the Buy Now, Pay Later sector.



Taking the lead in responsible lending: the necessity of regulating the BNPL sector

The Buy Now, Pay Later (BNPL) industry in the Netherlands has experienced a remarkable 30% year-on-year growth in 2022, indicating a surge in consumer adoption of this payment method. While BNPL offers convenience and flexibility, it is essential to recognise the risks associated with this rapidly expanding sector. Tinka, a responsible BNPL provider in the Netherlands, understands the need for regulation to safeguard customers and actively engages in lobbying efforts to ensure proper oversight. 

The BNPL market is projected to experience significant growth, with estimates indicating a compound annual growth rate (CAGR) of 22.4% from 2022 to 2027, reaching EUR 6.8 billion. This growth underscores the need for regulatory measures to protect consumers’ financial well-being.

While BNPL offers convenience and financial flexibility, it also poses potential risks. Unregulated BNPL providers may impose exorbitant late fees, hidden charges, and other practices that can lead to financial strain for customers. Furthermore, the ease of overspending without adequate oversight may contribute to excessive debt burdens.

Tinka prioritises customers’ well-being and, by offering products tailored to individual financial situations and ensuring transparent communication of interest rates and fee structures, we empower customers to make informed decisions. Tinka implements stringent fraud prevention measures to safeguard its customers. Recognising that individual company efforts are not enough, we actively participate in lobbying activities to advocate for the regulation of the BNPL sector, emphasising the necessity of regulation and the risks associated with the digitalisation and exponential growth of the BNPL market.

Examining regulated markets provides insights into the positive impact of proper oversight in the BNPL sector. For instance, in Australia, BNPL providers are required to hold an Australian Credit Licence, ensuring responsible lending practices and consumer protection standards. Sweden has introduced guidelines for BNPL providers, including credit assessments and affordability checks. Similarly, Germany has brought BNPL services under the oversight of the Federal Financial Supervisory Authority (BaFin) through the German Payment Services Supervision Act (ZAG). These regulatory frameworks prioritise transparency, responsible lending, and consumer protection, creating a safer borrowing environment for consumers.

Drawing insights from regulated markets, we can observe the positive impact of oversight on consumer protection and responsible practices. As the Buy Now, Pay Later sector continues to experience exponential growth, it is vital to establish regulatory frameworks to protect consumers. 

Reputational risk 

There is another compelling reason that can be seen as a call-to-action for regulation: reputational risk for merchants. More merchants look at the impact on their brand reputation while offering deferred payment options. They are no longer accepting that their brand is associated with a third party that is jeopardising the (financial) well-being of their customers by imposing late pay fees and other collection costs. Moreover, they become more aware of the fact that these third parties have a negative impact on their NPS, resulting in less loyal customers. 

By committing to responsible and transparent BNPL services, Tinka invites anyone to join the challenging journey to bring necessary control over unregulated products and create a better financial future for everyone. 

Unleashing the power of responsible in-store deferred payments for businesses and consumers 

The retail sector is continually evolving to meet consumers’ needs, and one emerging trend is in-store deferred payments. This new in-store payment method has caught the attention of retailers and customers due to the many benefits it offers. 

In-store deferred payments allow customers to take home their purchases directly, without paying immediately. Instead of paying the full amount upfront, consumers can choose to split their payments in instalments. This flexible payment option provides customers with the freedom to make purchasing decisions without immediate financial pressure, thereby lowering the barrier to purchase.

This innovation benefits retailers as well by boosting sales and conversion rates. Customers are more likely to make larger purchases, opening new opportunities for upselling and cross-selling. Moreover, offering this flexible payment method can increase customer satisfaction, leading to greater loyalty and repeat purchases. 

Tinka is at the forefront of this in-store solution. Through our partnership with Rivièra Maison and Amslod, customers can use their physical or digital Tinka cards to purchase products in-store and pay for them within 36 months with 0% or 13.9% interest (depending on the campaign). The Tinka card is available for free in-store and the Tinka app, and activating it takes under 90 seconds. 

Our company understands the needs and expectations of both retailers and customers and is, therefore, well positioned for the future of in-store retrospective payments. We will continue to build on this proposition and are ready for a successful future in the retail sector.

This editorial piece was first published in the Payment Methods Report 2023, which provides an in-depth overview of the latest worldwide developments in how people pay, the payment methods space, the innovative technologies that these methods work upon, and the best strategies on how to win at conversion and retention.

About Diana Apakidze

Diana combines 15+ years of experience in fintech and retail tech industries with the focus on profitable and responsible growth of the companies. She brings her expertise to bear in successfully managing enterprise-sized fintech accounts, catalysing industry-wide transformative change in the fintech sector.



About Tinka

Tinka is a deferred payments service provider based in the Netherlands, registered and authorised by the Netherlands Authority for Financial Markets (AFM). With more than 60 years of experience, we offer responsible deferred payment solutions. These solutions include invoiced Buy Now, Pay Later and different consumer credit options – online and in store.



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Keywords: payments , payment methods, ecommerce, BNPL, regulation, retail
Categories: Payments & Commerce
Companies: Tinka
Countries: World
This article is part of category

Payments & Commerce


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