QuadPay CEO Brad Lindenberg: The continued rise of BNPL payments

High-growth, US-based payment instalment platform, QuadPay, recently united with Australian publicly traded buy now, pay later (BNPL) firm, Zip Co. In a collaboration that significantly expands the group’s reach.

Brad Lindenberg, QuadPay co-founder emphasised to PaymentExpert that the firm’s collaboration with Zip was a natural step as QuadPay seeks to expand its presence in North America, as well as the importance of the Buy Now Pay Later market.

PaymentExpert: Firstly, can you tell us more about the QuadPay Zip collaboration and what it means for the growth strategy of the firm?

Brad Lindenberg: The opportunity to become a part of the Zip family was a no-brainer for us as we look to accelerate our North American and global expansion. As a result of the deal, we now have access to public capital markets to support our ever-growing merchant base and transaction volumes, while providing an opportunity to rapidly scale our team, increase brand awareness and reach even more consumers. 

Our combined entity will have operations across the world in five different countries (US, UK, Australia, New Zealand, and South Africa), with a combined annualized TTV of $2.0b, revenue of $167m, 3.5m customers and over 26k merchants to support the growth of our firm. 

Additionally, Zip’s support will help our platform accelerate product growth and continue to empower our strong culture of innovation, which benefits both merchants and consumers. We were amongst the first BNPLs (Buy Now Pay Later) to leverage virtual-card technology in partnership with Stripe and our team will use the additional funding of $130m to materially scale our product and engineering capability.

PaymentExpert: Are you able to give us more detail on the Buy Now Pay Later market in the US and how it can develop? 

Brad Lindenberg: Compared to its foothold in Australia, where BNPL grew from 3% of all ecommerce payments in 2018 to 8% in 2019, BNPL still represents a relatively small market in the US. But the US market has never been more ripe for credit disruption, and installment payment providers are capitalizing on that opportunity. This has created a healthy competitive landscape in the US which is beginning to rival that seen in Australia.

Prior to the COVID-19 lockdown, we were already starting to see people take fuller advantage of BNPL options. While BNPL is still in its infancy in the US, the lockdown restrictions we saw throughout the spring have helped accelerate changes in payment behavior as shopping migrates online. By 2023, BNPL is expected to account for 17 percent of the global commerce market and we anticipate continued growth and awareness among US shoppers. 

PaymentExpert: How big of a role can Buy Now Pay Later transactions play in terms of maximizing consumer engagement? 

Brad Lindenberg: Millennials are seeking more transparent, responsible forms of payment that don’t result in long-term debt. One telling sign of this shift: this generation uses debit cards to make purchases more frequently than any other form of payment.

BNPL is becoming extremely popular with consumers because it works differently to traditional forms of credit. The potential for BNPL transactions to maximise consumer engagement, loyalty and conversion is huge. What’s more, 40 percent of consumers say they are more likely to complete a transaction if BNPL is offered at checkout. 

Technologies like ours empower debt-conscious consumers to buy now, pay later across millions of merchants, like Nike, Michael Kors, Walmart and more. As an added bonus, QuadPay makes payment incredibly simple and convenient for consumers and retailers alike. Whether merchants are online-only, have one store, or one thousand, they can deploy QuadPay and see results quicker. Consumers are increasingly demanding new ways to pay and in the current, fiercely competitive retail environment, merchants that embrace BNPL early will have a clear advantage over those that lag behind.

PaymentExpert: Are there any additional fraud threats that come from these types of transactions and if so how do you combat them? 

Brad Lindenberg: Using QuadPay is just as secure as paying with a credit or debit card. It requires a name, address, date of birth, a US mobile number, and either a debit or credit card for sign up. When customers first sign into the QuadPay app, they are sent a verification code to their phone to secure the sign-in.

One of the key tenets of BNPL is the low risk for merchants – we offer all the upside with none of the downside. Merchants get paid upfront, while we absorb all risk and fraud liability.

QuadPay invests heavily in risk management and fraud and has some of the lowest loss and fraud rates in the industry. 

PaymentExpert: Following the current pandemic and its economic impact, do you believe mergers and collaborations will be more prevalent within the payment industry?

Brad Lindenberg: I wouldn’t want to speak on behalf of the entire payments industry, but from our perspective, a partnership with Zip was the right decision for QuadPay. Our founders have a history together. We share similar values and culture, in addition to similarities in our technology and approach to innovation. Both our businesses have shown incredible resilience during the current climate, which puts us in a strong position to accelerate growth at a time when many Americans will be looking for more flexible ways to pay.

More broadly speaking, as BNPL is increasingly positioned as a smart alternative to credit, traditional players in the payments space are recognizing the benefits of partnering with an established BNPL player. Our recent partnership with Stripe demonstrates how much potential there is to maximize impact with an end-to-end payment experience for consumers. Even ecommerce giants like Shopify have begun to expand into BNPL capabilities. We’re seeing just the tip of the iceberg in terms of expansion in this category.