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Scalapay now valued at $1.9b: but how is it different to other BNPL services?
Since publishing, the Federal Government of Australia has announced its decision to regulate the BNPL industry under the National Consumer Credit Protection Act. As a result, BNPL providers in Australia will soon be required to comply with Responsible Lending Obligations and hold Australian Credit Licences. The new regulations may also impact the way BNPL services operate by introducing credit checks for individuals signing up for these services in the future. Additionally, to promote transparency in credit services and safeguard consumer interests, the government plans to prohibit BNPL providers from automatically raising credit limits for customers who have not requested it.
There’s a new buy now, pay later platform taking Europe by storm which has already secured its status as a “unicorn”. But how does it compare to other platforms like Afterpay or Step Pay?
While it does not offer its services in Australia yet, the platform was created in a Bondi café and developed from the Innovation Campus in Wollongong to become the latest start-up to be valued at over $1 billion.
Scalapay co-founders, Johnny Mitrevski and Simone Mancini have closed a $692 million funding round for their start-up, as well as a valuation of $1.9 billion for its series B round.
The news comes after valuations for publicly listed BNPL companies, like Afterpay and Clearpay, have almost halved since November
In an interview with The Australian, Johnny Mitrevski noted that: “Getting it over the line in the current market was really hard. But it’s definitely a huge relief knowing that the company now has many good years ahead of it.”
How Scalapay compares to other BNPL companies
Scalapay originally started with the ‘pay-in-3’ model, in which the total value of the purchased product is divided into three. The first instalment is paid at the time of purchase, second instalment paid one month from the day of purchase and third instalment paid two months from day of purchase.
It now offers its customers the standard BNPL affair, including the option to pay in:
1. Three instalments
2. Four instalments
3. Entirety after 14 days
How Scalapay compares to Australian-based BNPL platforms
| Scalapay | Afterpay | CommBank’s Step Pay | |
| Interest charged | No | No | No |
| Account fees | None | None | None |
| Credit check | No | No | Yes |
| Individual purchase price | Determined on case-by-case basis | Up to $1,500 | $100 - $1,000 |
| Where you can use it | Limited to European customers and retailers | Affiliated retailers | Anywhere Mastercard is accepted |
| Payment plan | 1. Three instalments
2. Four instalments 3. Entirety after 14 days | 4 instalments over 6 weeks for new customers | 4 instalments over 6 weeks |
| Late fees | Payments more than 1 day late = up to 6 euros, payments more than 9 days late = additional 6 euros. Total cost will not exceed 15% of total value of order. | $10 per missed payment, plus $7 if not paid within 7 days. Late fees capped at 25% of the purchase price or $68, whichever is lower. | $10 per missed payment, capped at $120 per year |
Source: RateCity.com.au. Data accurate as of 24.02.22
Unlike other BNPL platforms which advertise a clear credit or purchasing limit, Scalapay determines the purchasing power of its customers on an individual basis. However, it advises it does not perform credit checks, so little is known about how individual purchasing power is calculated.
Scalapay’s success has also come from its choice to focus on merchants themselves. While other platforms have pivoted to providing banking products, such as Afterpay’s banking platform ‘Money’, Scalapay focuses on the customer and merchant interaction. It immediately pays the seller the full amount of the order, advertising that it “takes all risks of fraud and non-payment”.
“The merchant gets the ability to increase their average order value, and customers get free loans at the checkout,” said Mr Mitrevski.
“We’ve also launched a completely new product line helping solve a lot of the complexities that merchants have in terms of setting up their checkout and that’s helped us maintain and grow the valuation of the company,” he said.
While it may be a little while before Scalapay hits Aussie shores, it’s a timely reminder to BNPL customers that there are other platforms out there that may be more competitive than the one they’re using.
- To compare other BNPL platforms available in Australia, please visit our BNPL comparison hub.
Disclaimer
This article is over two years old, last updated on February 24, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent credit cards articles.
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Product database updated 28 Nov, 2024
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