- The founders of Mintpay on the merits of ‘buy now, pay later’
It is no secret that the world as a whole is going through a very troubled time financially. There needs to be a major shift in how we as a society approach financial decisions, and one pair of entrepreneurs in Sri Lanka is pioneering just that – a shift in how we as consumers buy things.
Urmila Chandrasekeram and Kukaraj Tharmasegaram, the Co-Founders of “buy now, pay later” (BNPL) platform Mintpay, have known each other for years. They went to the same school and same university (with both studying electrical and computing systems engineering), and then began their career at the same reputed organisation.
Mintpay is Sri Lanka’s first BNPL payment platform, built to enable responsible consumerism. Consumers can spread the cost of their purchase into three interest-free instalments using their debit card and are always rewarded for their good repayment behaviour with increased pay later limit.
The platform was started in 2019 in a bid to uplift Sri Lanka’s e-commerce and bring down the dependency on cash-on-delivery.
Brunch chatted with Urmila and Raj on what sparked this payment platform that over the last year has begun to revolutionise the Sri Lankan e-commerce market.
Following are excerpts of the conversation:
What inspired Mintpay?
We came up with the concept for Mintpay in late 2018. At that point, BNPL platforms were taking off globally in developed markets like Europe, Australia, and the US, but in South Asian markets like Sri Lanka, they were still an unheard-of topic.
If you see, 75% of Sri Lanka’s population has access to financial services, but credit card penetration is only 5%, which means that only 5% of Sri Lankan consumers have any kind of financial flexibility when it comes to buying goods. The majority of consumers are completely excluded or suffer from a restricted shopping experience. In developed markets, the next generation of consumers, millenials and Gen Z, have already adopted BNPL schemes, and we identified that there was a gap in the Sri Lankan market when it came to similar services.
Initially, when we discussed BNPL, everyone’s mind automatically goes into it thinking from a traditional credit point of view, thinking that you need to collect specific documents like utility slips, salary slips, etc. to determine your creditworthiness, but we understand that we’re living in the digital age and there are alternative ways to look at someone’s credit score using digital data points and determine their creditworthiness.
When we launched Mintpay in early 2019, Sri Lanka’s NPL (non-performing loan) ratio was quite high, which in turn meant that banks were issuing credit at higher rates too because it was high risk. There was also the perception that BNPL schemes wouldn’t work in developing markets like Sri Lanka. But as engineers and problem solvers, we understood what tech could do and saw huge potential in the Sri Lankan market and a mindset that needed to change. This was what inspired us to start Mintpay.
What was the response to Mintpay and how is it revolutionising the Sri Lankan market?
When we launched Mintpay, Sri Lanka had already gone through a bad time with one of those payday loan companies. As a result, there was a lot of stigma about services that claimed 0% interest, So, we had to build trust with both our customers and our merchants. We spoke to each and every one of our customers at that time and merchants on what they were worried about and how Mintpay worked.
Once we built that trust, Mintpay gained traction through word-of-mouth. More and more people began adopting it and growth started accelerating since then. Four months into our journey, we formed a partnership with Seylan Bank, which gave us a lot of credibility and helped people to start believing that Mintpay, and BNPL was something they could embrace. Growth happened exponentially from there on because once people embrace Mintpay, they don’t want to go back.
Mintpay revolutionises the market because of what it offers: An interest-free instalment scheme. For customers like millenials and Gen Z, who, by nature, disfavour credit and credit cards, BNPL provides an alternative way for them to have the same flexibility as a credit card but without any interest, using a debit card. Mintpay also helps them budget their spending, plan their purchases, and be able to make purchases they otherwise wouldn’t be able to afford at once.
For merchants too, Mintpay and BNPL is a revolutionary model, because they can now provide easy interest-free instalments to any customer, which helps merchants themselves to increase their average basket sizes, convert more customers, and attract more return customers because by offering BNPL, they now have an edge over their competition. In a nutshell, Mintpay makes sales happen that otherwise wouldn’t be made.
What was the biggest challenge of setting up Mintpay?
Fighting stigma and changing perceptions was a big challenge.
When we did our beta launch in 2020, we had to build a lot of trust. The Sri Lankan market has been known to misuse personal data, and this has affected how customers look at new companies and services. To break this stigma was one of the biggest challenges we experienced initially.
Mintpay greatly values its customers’ data privacy. All our solutions are compliant with iOS 14.5 which was designed by Apple to have the strictest data privacy. We don’t collect any information other than what is strictly necessary.
Convincing merchants to take a chance on Mintpay was also really hard initially. No one really knew about BNPL and the benefits it could offer. Once we convinced our first few merchants though, the Mintpay network grew rapidly through word-of-mouth.
There were also a lot of doubts around credit scores and deciding credit scores digitally. We are the only vertically integrated BNPL company in Sri Lanka that is able to decide a customers’ creditworthiness digitally.
What’s next for Mintpay?
Mintpay’s strength has always been user convenience through technology innovation. We have just completed one full year of operations in Sri Lanka, and the strength of our tech has allowed us to contribute towards solving fundamental problems in Sri Lankan e-commerce for consumers. We started our in-store rollout in Q4 last year and we aim to make this available across all our merchants this year.
We have some new, interesting products and features coming out over this year that we are confident will solve more problems for the Sri Lankan consumers as well as merchants.