Standard Chartered invests US$500 million in BNPL trailblazer Atome

As one of the biggest ‘buy now, pay later’ (BNPL) players in Southeast Asia, Atome continues to attract major investments. The Singapore-based company recently secured a US$500 million investment from Standard Chartered.

According to a Reuters report, Standard Chartered announced a 10-year fintech partnership with Atome Financial to help it grab a piece of the booming BNPL market in Asia, that has been thriving in the midst of the pandemic.

Apart from Atome, some of the biggest BNPL players in the Asia Pacific region include Hoolah, GrabPay, Akulaku, Fave, and several others. While there have been critics of BNPL, especially due to its lack of regulatory checks and requirements for granting installment payments, the services have been proven to be successful in the region during these uncertain financial times.

As the first major bank to unveil a significant foray within the sector in Asia, Standard Chartered is making an undisclosed equity investment in Atome Financial, which operates the Atome platform in markets including Southeast Asia, and Indonesian digital lending platform Kredit Pintar.

In a statement, the bank said the partnership will initially include BNPL services, targeted to roll out in Indonesia, Malaysia, Singapore, and Vietnam in the next few months, and later expand to include digital lending products.

The US$500 million funding will enable Atome Financial to grow and connect a wider ecosystem of merchants to a larger customer base, improving product access and financial inclusion for consumers across the region. At the same time, the bank said Atome Financial’s customers will gain access to more innovative financial services, easily accessed via their mobile devices.

For Judy Hsu, CEO, Consumer, Private and Business Banking at Standard Chartered Bank, the bank’s successful digital ventures and partnerships enable them to continue to be fearlessly innovative in disrupting ourselves to better serve their clients. “This partnership with Atome Financial allows us to be part of the rapidly growing digital consumer finance ecosystem and provides convenient and relevant digital financial products to complement and enrich clients’ digital lives,” said Judy.

The bank’s deep knowledge of Asia’s markets coupled with Atome Financial’s experience in digital consumer finance will allow them to reach even more customers and drive greater financial participation of those underserved and underbanked.

Jefferson Chen, the Co-Founder, Group Chairman and CEO of Advance Intelligence Group, not to mention the CEO of Atome Financial, commented that  “By providing consumers with easier, simpler, and more convenient access to a full suite of digital-first financial services, we can accelerate broader financial inclusion across both developed and emerging markets in Asia.”

Jefferson added that the partnership with Standard Chartered will allow them to expand their merchant network and help retailers increase their customer base and basket sizes, contributing to economic growth across the region.

More banks may consider BNPL after Atome

Meanwhile, Kanv Pandit, Group Managing Director, APAC, Banking Solutions, FIS believes banks are actively looking for ways to tap into the rapidly growing BNPL market, or they risk being left out of a major new market opportunity.

As BNPL’s global e-commerce market share is expected to double to 4.2% by 2024, in Singapore it is the fastest growing online payment method, on track to represent 13% of all e-commerce sales within the same period. He added that Some banks choose to launch their own BNPL offerings, either through the extension of their own credit card offerings or directly to merchants, Citibank being an example.

“In the case of the SC-Atome tie-up, this is a good example of “banking-as-a-service” in play, where a bank offers their platform to the BNPL provider to deliver an expanded set of financial products to the consumer. With its own set of benefits, we can expect to see more of such tie-ups and investments,” explained Kanv.

Kanv also pointed out that banks are looking to take advantage of the current conducive regulatory environment that has allowed BNPL services to flourish. This will also enable banks to leapfrog the product gap they have via such partnerships.

“On the BNPL providers’ end, they are rapidly seeking opportunities to expand their portfolio and leverage strategic partners to differentiate themselves from other players, creating more revenue models and improving their risk models at the same time. Banks can also offer them valuable market insights, given the wealth of data they hold,” clarified Kanv.

The reality is, with BNPL seemingly the preferred method of payment by consumers, banks may eventually just have to follow suit and give in to their demands if they want to remain competitive in the industry and remain relevant.

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