Digital bank Zopa has entered the highly competitive buy-now pay-later (BNPL) space, following suit of tech giant Apple and on the toes of the likes of Klarna.
Setting its sights on the UK’s £6bn BNPL market, Zopa’s new offering will combine the technology and innovation that enables instant decisions and fast consumer journeys of a fintech, alongside the consumer protection, credit checks and safeguards of a regulated bank.
First announced at Money2020 Europe, Zopa bank will roll-out its BNPL offering using a staggered approach that carefully and closely aligns with the Treasury’s ongoing consultation in the UK.
The BNPL is currently unregulated in the UK, and is led by the likes of Klarna and PayPal.
Silicon Valley giant Apple also entered the buy-now pay-later space earlier this week, announcing ‘Apple Pay Later’ at its annual developer conference.
Tim Waterman, Chief Commercial Officer at Zopa said: “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 is ushering in the era of BNPL 2.0, an evolution of BNPL that is regulated. 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.”
To date Zopa raised $500m from the early investors of Slack, Uber, and Alibaba to build a bank for saving and borrowing.
Since getting its banking license Zopa has attracted £1.2bn in deposits, more than £1.5bn of loans on balance sheet, issued 300,000 credit cards becoming a top 5 credit card issuer in the UK, and tripled revenue per customer.
Zopa hit profitability in March, just 21 months after acquiring its banking licence. Last year it appointed Monzo’s Graham Robinson as its Chief Risk Officer.