One of the fastest-growing components of the massive global point-of-sale (POS) payments market is Buy Now Pay Later (BNPL), a service that allows retail merchants to offer their customers POS credit options. Juniper Research estimates that 1.5B retail customers will spend $995B via BNPL services by 2026 (up from 340MM users in 2021). Demographic shifts are a key driver of this trend: Only 33% of Millennials have credit cards, but 87% of consumers ages 22-44 are interested in monthly payment plans.
The current POS financing experience faces numerous challenges, however. These include: an increasingly fragmented global regulatory landscape (challenging for lenders), constraints on the types of loans merchants can offer (challenging for merchants), and low loan-application approval rates (challenging for customers). We believe that New York City-based ChargeAfter is well-positioned to address many of these problems.
ChargeAfter is not a BNPL solution in the traditional sense, but a flexible multi-lender network that provides retailers, banks, acquirers, financial institutions, and other strategic partners with a branded and white-label platform for POS consumer financing. ChargeAfter integrates dozens of global lenders and banks on its platform, giving retailers and businesses access to leading financing partners across the full credit spectrum (prime, near-prime, and sub-prime) who provide a variety of BNPL products, such as card-based installments (i.e., split pay), long- and short-term installments and financing, revolving credit, B2B financing, lease-to-own, and more in a single integration. While traditional BNPL providers such as Affirm and Klarna typically provide financing directly to consumers through “vertically aligned” solutions that match all borrowers with a single lender, ChargeAfter enables merchants to connect with any or all of the lenders on its platform. This allows the merchants to offer their customers responsible, approved, and personalized financing through a single quick application, whether they shop online or in-store.
Responsible loan underwriting is a key part of ChargeAfter’s value proposition, especially as BNPL default rates rise quickly. Powered by its data-driven decisioning engine, ChargeAfter uses customer data to narrow the field of potential lenders in its network then automatically queries that group for loan offers. It then identifies the best match for the customer and informs the customer which lender is providing the loan and at what terms—all in a matter of seconds. This helps consumers connect to loans that better fit their lifestyles and enables merchants to offer credit to a wider range of their customers—leading to higher approval rates and average order values than the traditional BNPL providers. With ChargeAfter, merchants can increase their average order value by 52% and sales by 30%.
ChargeAfter’s experienced management team is headed by founder and CEO Meidad Sharon, who has more than 15 years of experience scaling global payments and SaaS businesses with a people- and customer-first approach. Sharon previously led marketing at SafeCharge, Comverse, and DHL.
To date, ChargeAfter is live in the USA, Canada, the UK, and Australia, with expansion into Mexico, Western Europe, and Japan ongoing.
As the BNPL market has exploded over the last few years, in 2017 Citi Ventures welcomed ChargeAfter into the Citi Accelerator in order to help it grow and achieve key milestones. Our colleagues in Citi’s Retail Bank and Treasury & Trade Solutions (TTS) business also provided ChargeAfter with critical mentorship.
“Given the growing usage and popularity of Buy Now Pay Later solutions, a multi-lender platform that provides more flexibility at checkout is imperative for ensuring clients have choice when completing purchases. This requires nimble and innovative consumer shopping experiences,” said Carol Grunberg, Global Head of Strategic Partnerships and Innovation at TTS. “We are thrilled Citi Ventures has invested in ChargeAfter, a Citi Accelerator graduate.”
Given ChargeAfter’s unique platform, strong traction, experienced management, and potential for growth in the fast-expanding BNPL market, Citi Ventures is proud to announce our investment in ChargeAfter’s Series B round. We congratulate Meidad and his team and look forward to an innovative and productive collaboration in the months and years ahead.
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