Is your Buy Now Pay Later provider siphoning customer data?

Your Buy Now Pay Later (BNPL) is almost certainly helping itself to your customers’ data every time they opt to pay in instalments during the checkout process. 

For a long time, internet users were either unconcerned about, or unaware of, how their data was being used. For well-publicised reasons, that insouciance has now disappeared. People – as well as the politicians they elect – are taking a much more punitive approach to the inappropriate harvesting and monetisation of sensitive data. 

Do you have your data-privacy house in order? Many businesses that believe they are safeguarding their customers’ data fail to realise a third party – their Buy BNPL providers – are hoovering up and profiting from that data. 

More on that shortly, but first a brief explanation of why this data-privacy blind spot continues to exist. 

When one of your customers makes a purchase using credit provided by a BNPL, they are almost always redirected off your website and onto the BNPL’s website. At this point, it doesn’t matter how stringent your business has previously been about data privacy. Once they get involved in the checkout process, BNPLs collect information about your customer and the good or service they are purchasing. 

Group 2

Ever wondered why BNPL shares are in such demand given their business model revolves around providing interest-free loans? It’s not just because BNPLs can charge merchants, as well as those BNPL users who fail to make repayments on time, modest fees. 

It’s also – as the ‘Privacy Policy’ page of most BNPLs will confirm – because they are in an enviable position to collect valuable data. Data they are legally entitled to share with any businesses interested in purchasing it. (BNPL customers tick a box saying they consent to the BNPL’s collection and sale of their data. However, most of these customers presumably never read the BNPL’s Privacy Policy and don’t fully understand what they are agreeing to.) 

BNPL’s eating your lunch

Your BNPL services have almost certainly sold your customer’s data to your competitors. If your business is selling, for instance, sporting goods, who is going to be more interested in knowing all about your business’s recent transactions than other sporting goods retailers that are looking to eat your lunch? 

In fact, the biggest BNPLs have been very forthright in their assertion that they are not even Payments businesses – but rather should be considered marketing businesses that do exactly this.  

Keep your customers’ data safe with Limepay 

Limepay is a BNPL that doesn’t force its users onto its website during the checkout process and doesn’t sell transaction data to third parties. Limepay’s founder and CEO, Tim Dwyer, recently belled the BNPL cat in Australian Fintech. Tim pointed out that BNPLs have been pumping up their profits by “playing retailers off against one another and using one retailers’ customer data to promote to its competitors”. 

Here’s how the process works according to Tim: “A BNPL provider might approach a sporting goods retailer and say, ‘We can give you access to X number of sporting goods consumers. But where do you think they source these X number of consumers from? The customers of that company’s competitors, who are already on the platform.”

Check it out for yourself

If you’re interested in learning more about preventing your competitors and BNPL providers profiting from your transaction data, you can watch a video that explains Limepay’s checkout process in 60 seconds here. If you then want to look into implementing a data-privacy-respecting BNPL in your business, you can arrange a demo here.    

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