Splitit, a fintech company that offers buy now, pay later (BNPL) solutions, has expanded its “Pay After Delivery” service to AliExpress shoppers in the United States, according to a news release. By offering flexible payment options like BNPL, AliExpress can potentially attract more customers and increase sales. Customers who might not have been able to afford a product upfront may now be able to purchase it using the option of installment payments.
AliExpress is a global online retail marketplace that is part of the Alibaba Group. Launched in 2010, it enables consumers around the world to buy directly from manufacturers and distributors, primarily from China and other markets. AliExpress is available in more than 200 countries and regions.
BNPL has become a popular alternative payment method for consumers, allowing them to make purchases and pay for them over time, as covered extensively by PaymentsJournal. This trend has been amplified by the pandemic, which has accelerated the growth of e-commerce overall and increased demand for flexible online financing options.
Splitit’s business model differs from those of most BNPL companies in that it allows customers to pay in installments using their existing credit on their credit card at checkout. This means customers do not need to apply for new credit or undergo a credit check when they sign up for Splitit. This model provides an additional layer of flexibility on top of consumers’ existing credit. However, as has been the case with other BNPL services, there’s a concern that such services could potentially lead to increased consumer debt.
“Splitit seems to have solved for a major issue with generic BNPL—losing out on those rich credit card rewards programs,” said Ben Danner, Senior Analyst at Javelin Strategy & Research. “The model is interesting in that it places a full purchase amount on the credit card, and allows consumers to pay on that reserve in fixed payments reducing the hold on the consumer’s credit line each month until it is paid off.”
“We know that consumers already have a difficult time with paying their credit card bills, and BNPL adds an extra layer of responsibility onto consumer budgeting. However, this is available credit, and consumers will be protected under their card program. For some, it will be a benefit, but I think for a lot of people, BNPL usage will lead to overspending and budgeting issues, just like their credit card ancestors.”