Thursday 14 May 2020
A new fintech that promises to give control back to retailers in the Buy Now Pay Later (BNPL) space has just raised $6 million for its payments service.
Limepay’s closed funding round consisted of high-net-worth investors, including Accor deputy executive Louise Daley and Telstra group executive Michael Ebeid.
The milestone comes as BNPL explodes in popularity in Australia, with one report from earlier this year predicting this market could double in size by 2023.
Mozo’s own research reveals 30% of Australians currently have a Buy Now Pay Later account, equating to 5.8 million users.
But according to Limepay’s co-founder and chief executive, Tim Dwyer, the fintech isn’t just another third-party BNPL provider like Afterpay or Zip Pay.
“We bring payment choices all in-house for our brands, so they can own the whole customer experience,” he said.
Through plugins that embed its service into merchant websites, Limepay aims to help businesses retain their customers within their own ecosystem at checkout.
It provides an alternative to the more common payments model of retailers having to send customers out into third-party marketplaces each time they pay.
Limepay’s chief revenue officer, Dan Peters said the service “brings together Buy Now Pay Later and the merchant payment gateway for the first time.”
Businesses can also customise the BNPL installments according to their individual needs. For instance, while a clothing retailer might allow customers to divide their payments into four, a brand selling more expensive goods like furniture might increase that cap to six or eight split payments.
Limepay also promises to pass customer data onto merchants, to help them identify payment trends.
“A brand for the first time ever can see and understand not just what customers are buying, but also how and when they’re deciding to pay for something,” said Dwyer.
In terms of the fintech’s ambitions, Dwyer said Limepay has set out to transform the merchant payments space not only online but also in-store.
“There is incredible opportunity to close the entire loop of a brand and customer experience, which may start online but may end up in a store,” he said.
“And if the brand can own that whole stack of experiences, they’re the ones that will end up having a competitive advantage over time.”
Peters agreed that the payments experience is becoming the“true business model differentiation” of this era.
He gave the example of Uber where every step of the user journey, including payment, is done within a single app.
“We think that kind of seamless, frictionless but highly customised payment experience is how Limepay will help lots of businesses in all sorts of different ways,” he said.
“We’re not a third-party payment solution forcing a particular process onto a business. We’re giving them the tools to innovate themselves around payments.”
Once a customer reaches checkout, they’ll see a toggle which allows them to switch between paying upfront or paying in installments. If they pick the latter option, they can then customise details such as payment days and the size of those repayments.
After that, it’s a matter of entering in their credit card or debit card information. Limepay accepts all major cards and digital wallets.
Consumers aren’t charged any direct fees, unless they miss a BNPL repayment. Missed payments come with a $5 late fee, capped at $10.
As for merchants, Limepay provides a price per transaction, similar to how a typical merchant payment gateway would work. A small percentage is charged on top of each purchase, depending on the payment volume and category vertical.
Dwyer reassures that transactions through Limepay are secure, as it is built on the technology of American payments platform Stripe.
“Stripe is fully PCI compliant [globally] … and so we leverage their security, compliance and compatibility around the world,” he said.
Interested in learning more about other BNPL services in the Australian market? Head over to our fintech hub for the latest news and developments.