‘Buy now, pay later’ service, Openpay, has officially launched with a new CEO, all-star advisory committee and an app that uses beacon technology to help drive sales.
The company offers retailers an alternative payment service for their customers with no financial risk. Unlike layby, with Openpay consumers take home their goods on the day and pay off the amount in numerous interest-free instalments, while retailers receive the full purchase amount the next business day minus a fee.
“From a retail perspective there’s no risk,” Openpay’s new CEO Simon Scalzo says. “If a consumer missed a payment the retailer would still get the full amount, they’ve still made a sale.”
Scalzo recently joined the company after working as a national retail advisor and helping found a buy now, pay later service in the car dealership environment.
“Because of my background in broader retail [Openpay] was a natural fit,” he explained. “It’s a business I understand and a market that I think is fantastic. Some of the stats on how big the market is, are upwards of $300 billion…The opportunity is huge.”
Scalzo said he believes the main challenge facing retailers at the moment is consumer confidence, and that fintech companies like Openpay can help retailers maximise sales. “[We are] able to provide retailers with the opportunity to increase their sales, especially when we’re talking about the very important Christmas season.”
Although it has competitors, Scalzo said Openpay’s longer terms and larger amounts make the company different, as well as the fact that the company is in multiple verticals. “We do a lot in retail but we also do quite a bit in automotive, home improvements like blinds and flooring, as well and medical and dental. Our system is very flexible and can be tailored for any retailer.”
The Openpay service has been around for about four years operating under a number of different business names in different verticals, and about 200 retailers are already using the service including Nike, Spotlight, House, and Audi, Subaru and BMW dealerships.
Scalzo says it makes sense to combine the brands to encourage customers to use the service at multiple retailers. “There was a thought process to bring them all under one name because we find that 65 per cent of people who use our system reuse it, so if they understand it’s the same brand in different verticals it helps to cross-pollinate.”
The company has also developed an app, launching at the end of this month, which uses Google’s Eddystone beacon technology to notify any consumer who walks into a store of the Openpay service before they’ve even started shopping.
“If you’re making [the customer] aware when they go to pay it’s not really helping the retailer because they’ve already made the decision about how much they’re going to pay,” explained Scalzo. “We’re letting the consumer know well before they make their purchasing decision, which we find is really powerful.”
The app also collects data, which retailers can use to analyse their customers and stores. You can view the data in terms of age, gender, high and low performing stores, and even how far customers are travelling to get to your location.
Scalzo says he believes fintech ventures like Openpay, which disrupt the retail environment, are the future, and he hopes to continue to grow Openpay’s investment and development in the space.
“Technology in retail is a huge space at the moment,” he says. “It’s a crazy space. There’s so much happening and it’s forever changing… I want to ensure that after we launch the app it doesn’t stop there, that we continue to evolve and invest in developing the technology—it’s about being able to assist retailers in this fintech space.”
For retailers unsure about adopting Openpay, Scalzo says the results speak for themselves. “[Our retailers] will tell you how they’ve enjoyed increases in incremental sales,” he said. “[Women’s clothing retailer] Taking Shape is a great example—they’ve enjoyed up to 300 per cent increase and this is a common theme among all our clients. It’s where the future is, where it’s going.”
After launching the new brand and switching the app on at the end of October, Scalzo said Openpay is planning an initial capital raise followed quickly by an IPO.
“It’s an exciting time and there’s a lot to do, that’s for sure,” he adds.
The newly appointed advisory committee features an impressive line-up of tech, consumer credit and retail experts including: Don Fraser, the founding executive director of Safeway in Australia; Kel Purser, former general manager of merchandise at Target; Stephen Borg, corporate director of Aopen; Neal French, head of Chrome and Android for work at Google APAC and Japan; and Harriet Wakelam, director of human centred design at IAG.
By Ruth Cooper
This article first appeared on www.retailbiz.com.au