Philip Belamant’s Zilch Launches Game-Changing BNPL 2.0 Solution in the US — South Coast Herald

As the 21st century’s second decade continues, the global financial services industry is engaged in its own evolution. Today, technology-focused financial companies (or fintechs) are harnessing sophisticated digital tools to offer new products to consumers and businesses globally. Artificial Intelligence (or AI), machine learning, and other technologies are utilized in multiple product and service offerings.

For perspective, the global fintech market is expected to enjoy robust growth through at least 2025, says Insider Intelligence. Much of this expansion is expected to take place within the consumer arena. According to research from leading wall street banks produced in Q1 2022, the global market for consumer purchases and bill payments in store and online is worth $45 trillion.

Specifically, to enable this market growth, global consumers continue to seek digitally enhanced financial management tools. UK-based fintech firm Zilch has developed a distinctive product that successfully meets this market need.

The BNPL market continues to gain traction

The global “Buy Now, Pay Later” ( BNPL) sector is responsible for much of the fintech market’s rapid rise. A May 2022 Research and Markets Report predicts that BNPL sales will experience more than twofold growth between 2021 and 2026. Recent big bank research sees the global BNPL market being valued at $1 trillion for year-end 2023.

In fact, the BNPL sector’s sales are expected to outpace those of several other prominent payment methods. By 2026, BNPL sales will likely make up almost one-quarter of online retail sales.

The BNPL industry’s impressive expansion results from the technology’s effortless integration into a global shift in consumers’ buying habits. First, BNPL services mesh well with many e-commerce platforms’ checkout pages. A short application process, and the ability to split a purchase into four interest-free loan payments, cement BNPL’s appeal among consumers.

Two important factors underlie the BNPL payments’ popularity. First, consumers can use BNPL vehicles to purchase items they could not otherwise afford with their current cashflow. In addition, consumers collectively have a strong desire to avoid paying credit card interest. A BNPL purchase alternative quickly and smoothly resolves both issues.

Zilch’s Meteoric Rise Continues with United States Launch

On May 17, 2022, London-based BNPL firm Zilch made its United States debut. CEO and Co-Founder Philip Belamant and his team selected the Miami, Florida market as its United States headquarters.

Before Zilch’s Miami office opened its doors, 150,000 pre-registered U.S. customers were already waiting poised to use the BNPL app’s services. Zilch’s partnership with Mastercard ensures that consumers can use the BNPL app everywhere this major credit card is accepted. For perspective, this means Zilch is compatible with more than 37 million retailers across the globe.

Philip Belamant says that based on Zilch’s initial market data, its United States target market includes more than one-third of the country’s population. “Our early data shows a target audience of around 125 million people, and we really think we have such a huge opportunity currently, just at our first two months of operation.

“Really, that’s been on the down-low and quiet to date. We’re already seeing more than four or five times the traction we saw initially in the UK, which is pretty unreal,” he explains.

Zilch Enjoys Unprecedented Growth in Its First 18 Months

Zilch’s United States debut is the latest capstone in the firm’s impressive growth. Since its September 2020 UK market launch, the company has developed a customer base of over two million users. In fact, Zilch has consistently added over 250,000 new customers every month.

For perspective, this fast expansion rate has enabled Zilch to become one of the UK’s biggest BNPL providers. The company has also been recognized as one of the globe’s most rapidly growing fintech businesses. Zilch’s partnerships with other leading fintech firms are helping to drive the company’s expansion.

To fuel this high-speed growth, Zilch successfully raised $400 million in debt and equity. Goldman Sachs and other investors contributed to the funding pool. At Zilch’s last Series C funding round in November 2021, the company was given a valuation of more than $2 billion. This achievement brought Zilch into the rare double unicorn ranks.

How the Zilch BNPL 2.0 Model Works

Philip Belamant emphasizes that the Zilch team developed the BNPL 2.0 concept after extensive market research, derived hugely from Philip’s background in South Africa, which saw him understand the needs of people and utilize payment technology in such an easy-to-use way that it benefited and changed social mobility and inclusion for millions of people’s lives. To launch in the US, he specifically utilized the knowledge and experience gained from Zilch’s 2.5 million UK customers and conducted a targeted survey of United States consumers in partnership with YouGov, the leading consumer survey and data experts.

“Our experience in the UK, and the survey we conducted here in the U.S., make it clear that U.S. consumers want much more from BNPL providers, what we call BNPL 2.0 — which removes what consumers dislike (lack of ubiquity/fees and/or late charges). Zilch also gives what consumers say they value — cashback, which can be used to discount larger purchases,” Belamant concludes.

Under Zilch’s new parameters, customers can pay for their purchase in two ways, both of which provide them with specific benefits. Customers who pay in full receive 2% instant cashback that can be applied to future purchases.

Alternatively, customers can pay in four installments over a six-week period. If they make all scheduled payments on time, no interest charges will be applied to the account.

The Zilch Flywheel of Value

Philip Belamant enthusiastically describes Zilch’s twofold benefits for its customers. “So we’re really excited about that; and ultimately, when we look at what we’ve created, it’s really this flywheel of value. So, .

“What we find is that flywheel creates such a huge amount of value for our customers because they don’t just use Zilch for split payments, but they use us habitually. They use [Zilch] to add value daily. And what’s so exciting is to see people really embracing that.

“Customers today are using our product (in some cases) up to 10–15 times a month. I mean, that’s more times in a month than they would Amazon! You know, all of us use products like that day in and day out — and customers are using Zilch more times in a month than they use other BNPL 1.0 providers in a whole year.

“I think that shows the value we have created for our customers, where they really are voting with their dollars and their fingers on their phone by opening our app more than anyone else’s and using our app more than some of these really amazing brands like Amazon,” he remarks.

Belamant also says that Zilch’s business is not limited to eCommerce or phone-based sales. In fact, over half of Zilch’s transactions take place in brick-and-mortar businesses. “Now with us, obviously we provide our service everywhere — so online and offline — and in fact, today circa 50% of our volume is actually in-store, which is really interesting,” he explains.

Zilch Promotes Customer Affordability Standards

Philip Belemant maintains a strong focus on consumers’ financial health. Therefore, Zilch has established a proprietary program for helping to ensure that customers can afford the purchases they make with the app.

Zilch’s Customer Affordability Profile

Zilch’s goal is to facilitate consumer purchases while ensuring the transactions meet individual customer affordability criteria. Toward this end, Zilch utilizes open banking technology and soft credit checks.

In addition, the company generates proprietary customer behavioral data every time an individual makes a purchase. Taken together, this data enables Zilch to generate an accurate affordability profile and a snapshot of the consumer’s financial situation. Based on the results, Zilch can make targeted spending recommendations to reach customers.

Zilch’s Mutually Beneficial Partnership with Experian

To enhance its internal data analyses, Zilch has established a partnership with Experian, an internationally recognized credit reporting agency. Zilch will be pioneering in reciprocal reporting in BNPL, further enhancing the agency’s relevant data with its best-in-class utilization data.

These collaborative efforts are designed to increase reporting accuracy and transparency. Both parties seek to contribute to consumers’ financial health and reward customers for their responsible spending behavior. In turn, this can have a positive impact on customers’ credit scores.

Philip Belamant explains how the Zilch-Experian partnership will enhance Zilch’s data analysis and accuracy efforts. “They [Experian] collect over 1 billion data points a month. That puts us in a good position to manage our books and how our customers are spending with us,” he says.

Zilch Focuses on Meeting Consumers’ Financial Needs

As Zilch’s CEO and Co-Founder, Philip Belamant readily identifies the company’s unique selling proposition (or USP) that differentiates the brand from its competitors in BNPL 1.0. It’s these companies that he emphasizes are BNPL businesses that are set up to focus and serve the retailer first.

As an outgrowth of this relationship, the typical BNPL company provides a service to the customer (or end-user). However, Zilch has taken an entirely different approach that has resonated with millions of customers.

Philip Belamant explains Zilch’s philosophy clearly and succinctly. “In Zilch’s case, we just flipped that on its head, and we actually said: Well, why don’t we go direct to the end-user? Let’s go and provide our product to the end customer, the person, and as a consequence, we can drive value to the retailer. It’s such a fundamental shift in how you think about it.

“So what we’ve decided is: Let’s champion the end-user. So let’s go and build the most empowering way for people to pay — and that’s really what we are all about and trying to achieve here at Zilch, and that’s why we feel what we have created is getting so much traction and we’re so excited to obviously now bring this to the States. It’s going to be really interesting,” he summarizes.

Two Factors Drive Zilch’s Impeccable Market Timing

As with any successful product or service offering, Zilch is responding to a market need at exactly the right time. For background, Philip Belamant says global consumers are facing an alarming cash crunch. The cost of living continues to spiral upward, with prices rising for many common commodities.

“I’m sure you are probably feeling the same way all of us are. You’ve got this cost of living crisis that’s causing all prices to surge. You’ve got gas going up, interest going up. Everything is going up!” he exclaims.

Credit Card Companies’ Predatory Practices

Philip Belamant says consumers are also negatively affected by credit card companies’ predatory practices. He points out that account fees and late charges are impacting consumers’ wallets when they can least afford them. In parallel with Zilch’s U.S. launch, he describes the charges’ collective effect on United States consumers.

“In 2020, U.S. consumers paid $120 billion in fees and late charges to credit cards, which we believe is unacceptable and fundamentally misaligned with the interests of consumers. They are being set up to fail and need more flexibility, especially during a cost of living crisis and a time of surging inflation, to pay for goods and services how and when they want — with a system that avoids late payments and unnecessary, onerous fees,” he declares.

“And for us, we look at this and we go, ‘What better time than now to come to the market and to really go and make sure customers understand and know that they’ve got a free way — zero interest, zero fees — a free way to actually defer the cost of some of these essential items and to better manage their cash flow.’ That just has to be better than between 20 and 30% APR on credit cards and revolving credit cards. It just has to be.

“Can you imagine us bringing that now to the U.S., growing to millions of customers soon in the U.S., and saving billions in fees and interest for people to defer the cost of these types of purchases? That’s what we’re all about. That’s what we’re trying to achieve,” he concludes.

Forward-thinking Zilch Embraces Varied Demographics

As Zilch establishes a presence in the massive United States market, Philip Belamant says the company will systematically attract multiple demographics. “Today, about 45% of our customers are between the age of 25 and 35. The rest are actually outside of that and obviously older than that,” he explains.

Zilch recognizes that consumers of all ages and backgrounds have personal financial challenges. Under Philip Belamant’s direction, the company will employ its game-changing BNPL 2.0 product to provide an optimal solution.

Originally published at https://southcoastherald.co.za on June 13, 2022.