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Banco Santander will launch its consumer financing platform in Spain based on "buy now and pay later", to take advantage of the boom in e-commerce among young people

Christina Casillas

After the good experience in Germany, with two million customers, Banco Santander will launch Zinia, its consumer financing platform, in Spain throughout 2022.

Zinia operates under the “buy now and pay later” formula (buy now and pay later). In this way, it will be the first large Spanish bank to compete head-to-head with the fintechs, the true drivers of this business. In addition, it will allow you to benefit from the rise of electronic commerce, especially among the youngest.

This modality allows customers of 'online' and physical establishments to divide purchases into several installments without interest. This is reorganizing the payment industry worldwide, since this formula is a boost for retail sales, especially through trade electronic (which was consolidated during the coronavirus pandemic in 2020) and above all it is carried out among the youngest clients.

What figures are handled? In markets like Australia, the United Kingdom, and the United States, they accounted for $150 billion, or 3 percent, of global e-commerce sales last year.

According to Ben Laidler, global markets strategist at eToro, "it focuses on high-margin consumer discretionary purchases, such as clothing and makeup."

But for retailers, these formulas also benefit them as it implies a higher conversion rate (purchase), a larger shopping basket and a higher frequency of repurchase by consumers in the store.

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The question is, if you don't charge interest, how do you make a profit? The answer is easy. They earn revenue either from late fees or from software providers.

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Related: The dominance of Banco Santander and BBVA in Mexico scares international banks

A market of 19 million

Banco Santander has confirmed that it will extend its Zinia platform to all the countries present. This represents a potential market of 19 million people and 18 countries. In addition, the entity will enter into face-to-face competition with fintech companies, the true promoters of this service.

To this we must add that the entity plans to offer offers and advantages through the application for those who use the service through the application.

As for the establishments that have joined, they already exceed 63,000.

SANTANDER (SAN)SANTANDER (SAN)-0.06-1.72 %3.15

Klarna's path to add 1 million Spanish users

This idea is not new. To give an example, El Corte Inglés had been financing purchases for three months without interest for years. But what is clear is that it is a clearly growing market, according to the figures handled by Klarna, a Nordic bank that landed in Spain in July 2020, in full de-escalation, led by Michael Kors.

Since then and through October 2021, more than a million new consumers have used Klarna's flexible payment options, adding to the company's more than 90 million users worldwide.

In addition, more than 200,000 Spanish shoppers have downloaded the all-in-one shopping app, and more than 30,000 use it each month.

In addition, starting with one brand, there are already 300 brands that use it.

A consolidated model in the United States

In the United States it is a consolidated model and one that continues to rise. Thus, one of the companies that acts as the flagship of this formula, such as Affirm, has a capitalization of 22,000 million dollars, but has also generated corporate movements such as the purchase of Block for 29,000 million dollars of After Pay in Australia.

There are also MasterCard, Paypal and the cooperation agreement between Apple and Goldman Sachs to enter this business model in the face of upward growth prospects.

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Santander Bank

Christina Casillas

Writer at Inversión y Finanzas.com since 2007 and in the world of economics since I started doing journalism. Passionate about monetary policies.

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