German savings banks in the Sparkasse group have launched a buy now pay later service in their mobile payments app, enabling customers to request a loan to pay for goods at the point of sale via their Android smartphone and arrange to repay it in installments. sparkasse buy now pay later

Customers can apply for a loan of between €500 (US$580) and €3,000 (US$3,476) within the banks’ app and, once the application has been approved, “the amount is reserved in the linked checking account in a few minutes and the customer can immediately dispose of the money at the point of sale,” Sparkasse says.

“The express loan is repaid either as part of an instalment loan or after 30 days from the current account.

“The customer can also request the instalment loan directly in the app during the application process for the express loan and then conclude it in their online banking via the electronic mailbox.”

“It is the first step in expanding the mobile payment app into a comprehensive payment platform,” Sparkasse adds.

“Bundled in just one app, the savings banks will in future be able to offer added value and additional services that go far beyond paying.”

Sparkasse launched a software POS service that allows merchants to accept PIN-free contactless payments on their Android NFC smartphone in April. sparkasse buy now pay later

Market Impact

Sparkasse’s integration of BNPL into its mobile app has the potential to significantly impact the German BNPL market. As a well-established and trusted financial institution, Sparkasse’s move could:

• Increase BNPL adoption: The convenience and accessibility of BNPL through a familiar banking app could encourage more consumers to adopt this payment method.
• Drive competition: Other German banks and financial institutions may feel pressure to offer similar BNPL services to remain competitive and meet customer demand.
• Enhance customer loyalty: By providing a valuable and convenient service, Sparkasse could strengthen its relationship with existing customers and attract new ones.

Conclusion

Sparkasse’s decision to add BNPL functionality to its mobile app represents a significant step forward for the German BNPL market. By offering a convenient and accessible way for customers to use BNPL, Sparkasse is likely to increase adoption of this payment method and drive competition among other financial institutions. This move underscores Sparkasse’s commitment to innovation and its ability to adapt to the evolving needs of its customers.

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