Singapore BNPL Founders Q&A

Helicap: In a rapidly growing space, what sets your BNPL solution apart from the others?

Hizam (Rely):

Rely partners with the largest enterprise retailers/brands in Asia such as ZALORA, JD Sports, Qoo10 and many more. We tailor our services to fit the needs of large enterprise retailers. We also believe that partnerships are key to win the market. Our partnership with Razer Fintech to enable BNPL for retailers across the region is testament to our partnership approach.

Stuart (hoolah):

As the first company to introduce the BNPL concept and launch into Singapore in 2018; we were also the first multi market BNPL in Asia.

There are also a number of key differentiators that sets us apart from the others:

1. Team with deep experience in payments, BNPL & retail:

Our business is led by an experienced execution leadership team of BNPL and payment veterans with in-depth expertise in payments from around the world. This includes myself, our Chief Financial Officer Andrew Broad, Chief Technology Officer Jason Van, and Chief Operating Officer Arvin Singh from Worldpay, Afterpay, and Visa.

2. Technology

While we deliver an exceptional experience through our customer and merchant facing products, the true magic lies in our dynamic back-end tech, which allows us to rapidly scale into new markets. Within our tech stack is our own proprietary risk decision engine, built and operated by our CTO, Jason Van, who previously spearheaded the technology for a global BNPL company and has a deep technical expertise in creating and implementing systems that are considered industry benchmarks for managing fraud and resilient payments. hoolah’s proprietary risk decision engine helps optimise acceptance rates while managing any nefarious behaviour, all without relying on third party data – ultimately optimised to drive six to 10 times volume for merchants.

3. Walking the talk on ‘Responsible Affordability’

We do see a number of lending and credit solutions taking advantage of consumers, so BNPL has understandably some detractors. We place a strong emphasis on our motto, ‘Responsible Affordability’ since the business was founded on day one. We are heavily invested in delivering education to the consumers around responsible spending, we also reject transactions when we see consumers moving in the wrong direction. This is so important to us as a sustainable and responsible business, as our business model is never based on making money off the consumers and late fees.

4. Scalability

When we set up the business three years ago, we had a clear intent to grow hoolah into a multi-country and multi-merchant lifestyle platform. Critically, we built our technology platform with this in mind, enabling us to localise language, compliance, communication, people, and payments. This has given us the ability to quickly launch in new markets with minimal fuss such as Malaysia and Hong Kong.

David (Atome):

1. Strength and depth of our merchant portfolio. We currently partner 3,000 merchants across 9 markets. Key partners include Sephora, Agoda, SHEIN, Charles and Keith, Zara, Marks & Spencer, Pandora, Furla and many more. In Indonesia, we partner with Indonesia’s largest retail and lifestyle distributor, the MAP group, who manage 150 premium brands.

2. Our deep sense of purpose. Since Day 1, our mission has been to improve the lives of consumers through greater financial access and technology.  In fact, that is what Atome stands for: “Available to Me” and “Access to More”.

3. Our technology and deep experience in this region. Asia is a highly fragmented market and when you think of emerging markets like Indonesia, Vietnam, Thailand where a majority of population is unbanked or underbanked, how we can improve financial inclusion among people who have little to no credit history or bank accounts? So our experience and technology to assess credit risk and underwriting must be highly localised and accurate.

4. We are fortunate to be part of our parent brand, Advance Intelligence Group, which has raised over US$130M over three rounds. This has allowed us to rapidly scale into 9 markets in 15 months and serve over 20 million users in the region.

Helicap: What do you say to critics who say BNPL solutions give consumers a false sense of affordability and increase indebtedness?

Hizam (Rely):

Rely’s BNPL business model reflects the true objectives and alignment we have with our customers. Unlike traditional revolving financial products, we only make money when customers pay us back on time. So it’s in our best interest to ensure we only provide our service to those that can afford it.

Stuart (hoolah):

We do acknowledge that there is a misconception around the Buy Now Pay Later industry amongst consumers, and we’ve seen some BNPL players in the markets promoting people to spend beyond their means. A number of lending and credit solutions also take advantage of consumers – so BNPL has understandably had some detractors. However, not all providers are the same, which is why we started out with this context of Responsible Affordability. This has been our motto since we founded the business from day one.

At hoolah, we want to allow customers to make an investment into quality products and lead the lifestyles they want or aspire but at the same time, make sure they spend responsibly and don’t fall into debt. It’s ok for people to want things and to shop, as long as it’s responsible. It’s really about allowing customers to take control of their spending rather than overspend. There are instances where we’ve rejected transactions when we think people are moving towards the wrong direction. This is another reason why we pride ourselves on taking on this responsibility to educate consumers around topics such as personal finance and financial literacy that we share regularly on our platform.

We also make use of our own proprietary risk decision engine that not only crawls through various data points to assess a customer’s financial ability, but also looks at their purchasing behaviour to ensure they are spending responsibly using the platform. In addition, we personalise order limits for consumers to protect them, as well as our merchants and our business. We actively ensure that users do not overuse the platform and when the cap is hit, they will need to pay off outstanding instalments before they can use hoolah to place a new order. New users, especially, will have more stringent limitations on their active orders at any one time, to prevent them from overspending. There are instances where we’ve rejected transactions when we think people are moving in the wrong direction, such as when they make too many orders.

David (Atome):

I think the concerns are valid and all BNPL players should act and behave responsibly so the interests of both businesses and consumers are protected. At the same time, we should seek to understand why BNPL is the fastest growing online method to pay, according to FIS Worldpay. Overall, the industry as a whole needs to do more to educate stakeholders because there is a general lack of understanding of the BNPL business model.

For Atome, our revenue is from merchant fees. We charge zero interest, zero annual fee, zero service fee. Our average transaction size is between $100-$200, relatively small amounts compared to one’s income. When a user misses a payment, we automatically suspend his or her account. We do charge admin fees for missed payments but they are capped at a maximum of $60.

So, it’s in our best interest to ensure sustained and responsible repayment behaviour, which leads to repeat usage, which leads to a win-win-win outcome for the consumer, merchant and us.  

Helicap: What will it take to remain a leading BNPL player in Singapore and Southeast Asia? PayPal, Shopee and even banks are starting to roll out BNPL solutions. Do you see this as an existential threat that will drive consolidation in the industry or do you believe that independent BNPL players are here to stay?

Hizam (Rely):

There’s still a huge growth opportunity in the BNPL sector for the region. It’s just the beginning and we’re bullish the addressable market will grow to accommodate multiple BNPL firms. However, it will be a competitive fight for the number 1 spot.

Stuart (hoolah):

We don’t see this as a threat. What it does do is help drive awareness of this solution for merchants and consumers. Then it’s on us to educate them with our experience and scale on what works to really optimise the merchants’ investment in our solution for the greatest outcome. Our business is product-led and our roadmap helps us to continue to stay ahead of the curve, along with our investment in building a bank grade infrastructure that is robust and secure, led by our CTO, with his deep technical expertise and background specific to the BNPL industry.

In fact, this gives us plenty of opportunities to educate retailers about what true Buy Now Pay Later looks like and the value we can bring to the merchants. We believe that true BNPL players with responsible business models and a focus on the ecosystem across Asia (not just SEA) will eventually emerge as winners.

David (Atome):

Re: your first question, a couple of focus areas:
a) deepening breadth and depth of retail partners across all categories
b) consistently delivering value and business results for our retail partners
c) better user experience and service

Re: growing competition, competition is overall healthy and validation of BNPL itself. Definitely interesting space to watch. What will banks offer, or in some cases, who will they partner? Will the marketplaces offer their own version as part of a broader financial services play or will they too partner? Will BNPL players too begin to mature and offer other financial services or digital bank play?

Helicap: Singapore’s MAS has made it clear that regulation of the BNPL space is coming. How will such regulation impact your business and what do you foresee to happen?

Hizam (Rely):

Our BNPL solution has clear potential benefits to consumers and businesses. The introduction of regulations will enhance the existing customer protection we have and improve them at an industry level. It’s likely that regulations will benefit the BNPL industry such as raising consumer trust in regulated BNPL firms and preventing bad actors entering the industry.

Stuart (hoolah):

We highly welcome the regulator’s review of the BNPL sector to ensure financial and social responsibility in Singapore. Our business is wholly focused on responsible spending – ‘Responsible Affordability’ has been our motto since we founded the business from day one – and our approach to risk management and consumer care. Our business model is never based on late fees – it is only sustainable with long term consumer relationships with our proprietary risk decision engine protecting consumers, making sure they do not go beyond defined limits to prevent overspending. We think it’s certainly important to have regulation in place to improve transparency and deter companies with unethical business models from going into this industry and making a revenue out of late payments from the consumer.

David (Atome):

We are in active and positive dialogue with MAS. We want to build a long-term, sustainable and healthy business so we welcome regulation that prevents bad actors, which protects us too and which looks after the interests of consumers and merchants alike. Regulation could potentially come in the way of tighter credit checks and BNPL marketing, as well as working with credit bureaus to monitor user repayment behaviour and defaults.

Internally, we already take pro-active steps to monitor, and sometimes prevent usage by users with irregular payment behaviours or transactions. We are also working on a range of features to encourage smart spending, budgeting and good repayment behaviour to be released in the next few quarters.

Helicap: What has been your biggest success in your startup journey thus far? What are the achievements you are most proud of?

Hizam (Rely):

Our key partnerships with leading brands such as ZALORA, JD Sports and Qoo10. Humbled to be able support and help them grow their business.

Stuart (hoolah):

Waking up every day and seeing our hoolahgans rocking it and delivering on what we dreamed is the biggest success. The journey has been exciting, undulating and winding. I really am most proud of getting the business from an idea sitting at my desk to what we are seeing in front of us today. Bringing together a diverse group of smart, capable and experienced people to deliver and execute on this is something that I pinch myself on every day.

David (Atome):

Probably Atome, and scaling the business to 9 markets in 15 months, all this in the middle of a terrible pandemic which has limited travel, face-to-face meetings etc. None of this would have been possible without the support of my peers and colleagues, and for that, no words can thank them enough.

What makes me proudest is when I hear our merchants saying Atome has helped them grow their business or when consumers say it has helped them improve the quality of life for them or their loved ones.