The buy-now-pay-later or BNPL format has become commonplace in the American economy. With a BNPL transaction, a customer can purchase a product or service and pay for it in installments. The customer will get what one needs now, and that person will cover the cost for it over time. The process is convenient for many, especially for those who might be dealing with financial issues. It doesn’t require a credit check, making it easier for people to access than a credit card or a traditional loan.
It is no surprise that the BNPL format is expanding to other industries. The American travel market is one of the latest fields where the BNPL industry is entering. The British fintech company Fly Now Pay Later is making this happen, as Fly Now Pay Later is planning on operating in the United States.
Fly Now Pay Later recently raised capital to help it start a test platform for American travel companies. The company raised £10 million in Series A funding, which is equal to $14 million. FNPL now has £45 million or $62 million in funds. The work goes alongside the £35 million or $48 million that the team raised at the start of last year.
FNPL has been beta-testing its current technology in the United States since late 2020. The new funds FNPL has raised will help the company expand its efforts in the country. The company also has hopes of expanding its work to Germany and other parts of Europe soon.
FNPL uses a system that helps people book travel services and pay for them over time. Instead of paying for them upfront, people can pay for those services over a few months. The service charges a single fee for its convenience and to cover the risk with the transaction. The system offers a useful setup that helps people pay for their travel services without worrying about paying too much right away.
How Does FNPL Work?
Fly Now Pay Later uses a distinct approach to help people book travel services:
- A customer will download the FNPL app to start. The app is available on iOS and Android devices. Customers can also send their mobile numbers to the website for a download link if the app isn’t available for their devices.
- The customer will then look through the different vacation listings available through the app. FNPL has partnerships with various travel service providers, including prominent domestic airlines.
- The customer then provides the necessary payment information for one’s order after determining what one wishes to utilize. The customer can provide one’s credit card data to provide proof of a source for paying for something, for example.
- The buyer will enter a payment plan at the end. A customer can choose to pay for one’s travel purchase in as little as thirty days. The customer could also pay for services over a few months with lower monthly totals.
- The customer will be subject to a one-time transaction fee. The fee is worth 14.99% of the total transaction. The customer will get a complete look at the total cost for the trip before agreeing to pay for everything.
- After agreeing to the deal, the customer can enjoy one’s vacation and then pay for it at the agreed-upon times.
The system can prepare limits over how much someone can use at a time. There may be a limit of about $4,000 for each transaction, for example. Such limits ensure FNPL will stay protected and that the travel service providers will not lose funds from those who cannot pay for services.
What Makes It Useful For Customers?
Customers can utilize FNPL for many reasons:
- FNPL ensures buyer’s protection, meaning all items one books through the app will be fully confirmed and paid.
- Many FNPL transactions can work with no financing required.
- The payment terms are flexible. Customers can pay for their travels over up to twelve months if necessary.
Why Would Businesses Want To Use FNPL?
Businesses that offer travel services can use FNPL because it makes their services more accessible. Travel service providers can offer more flexibility, as they help people see what it will cost for them to use their services.
FNPL also provides full protection, ensuring that all service providers are covered for any potential losses they might experience. The 14.99% transaction fee FNPL puts on all its transactions ensures that FNPL has the funds necessary to cover whatever losses a provider might experience in a deal.
Possible Gains Are Coming
Fly Now Pay Later is looking forward to expanding to the American market, especially as demand for travel starts to pick up. The global pandemic has forced many people to cancel their prior travel plans. But as infection rates drop and vaccination rates rise, more things are starting to reopen throughout the country. People will be more likely to want to travel to different places, and they might have been saving up their funds to enjoy more exciting trips.
Fly Now Pay Later will be there to help people book their vacations as they get back on the road. FNPL hopes to take advantage of the newfound interest people will have in traveling, especially as more parts of the country start to reopen.
Will There Be Competition?
Fly Now Pay Later may be subject to some competitors, especially as travel becomes more popular in the United States. The BNPL service Uplift recently introduced support for domestic air travel payments. The company has also reached agreements with many airlines as of late.
It is also possible that various groups like the home-share company Vrbo could potentially enter the BNPL field. The convenience and flexibility of the BNPL industry will be something that such companies will want to enter.
The one thing that’s for certain is that travel demand will increase as the 2021 calendar year progresses. Fly Now Pay Later is in a strong position to gain revenue through this newfound demand, but that company won’t be the only one looking for some gains.
