Axios Pro Exclusive Content

White-label BNPL solutions challenge traditional players

Illustration of a dollar sign on a grocery store checkout conveyor belt.

Illustration: Megan Robinson/Axios

As the growth of buy now, pay later cools, traditional players should be looking over their shoulders at competition from white-label solutions, says Lily Varon, a senior analyst at Forrester.

Why it matters: One big challenge for retailers is integrating payment solutions as seamlessly as possible into the checkout process. BNPL services, initially a boon for retail as online shopping skyrocketed during the pandemic, have seen headwinds in recent months.

How it works: Under a white-label, or private-label BNPL solution, only the retailer's name appears, while the provider powering it remains invisible.

  • The consumer doesn't get diverted from the brand or the website, because the payment option is embedded into the checkout process.

Yes, and: Many white-label players have a unique take on the BNPL process, better positioning them for success, Varon tells Axios.

  • Splitit CEO Nandan Sheth says it doesn't originate loans (which cuts its risk exposure significantly), instead using the available balance on customers' existing credit cards and unlocking it for payment installments.
  • Bread Financial (formerly Alliance Data), on the other hand, is already a regulated financial institution — another advantage in a rocky regulatory landscape, says its SVP Rick Cunningham.
  • As a white-label provider that also provides credit cards, Bread's only goal is to drive its partners' sales — and that's how it makes money, he tells Axios.

State of play: Along with Splitit and Bread Financial (both publicly traded), other white-label BNPL entrants include Variant Equity Advisors-backed Certegy, FlipPay, and Amount, which teamed up last year with Barclays to offer its own product.

  • A number of overseas startups have announced new white-label products just this year, including Railsr (formerly Railsbank) and Codebase Technologies.

What they're saying: Under a white-label model, the providers don't have to pay for marketing, for example, or expensive pilots to lure in big-name retailers, Cunningham of Bread Financial says.

  • "Each one of these providers are trying to acquire consumers, so that takes marketing dollars and that’s skyrocketing," Sheth of Splitit contends.
  • And the model is also predicated on shifting the consumer relationship from the retailer to the BNPL provider, he tells Axios.
  • White-label providers, however, are not disrupting the relationship between the retailer and the consumer, he claims.
Go deeper