Tough economic times have made paying for goods in several installments very popular, boosting the buy now, pay later (BNPL) trend around the globe. When it comes to the travel industry, the service has rapidly caught on with consumers who are looking for travel-centric flexible payment options for often expensive flight tickets.
London-based payment provider Fly Now Pay Later has been catering to this need since it launched in 2015, and is looking to further expand its business with the $75 million it has raised. The round brings the total fundraising by the British FinTech company to $150 million.
Fly Now Pay Later enables customers to pay the cost of a trip in up to 12 monthly installments and is focused on key BNPL markets including the U.K., European Union and the U.S., the world’s largest travel market.
“The US, which we entered in 2020, purposely formed a big part of our resilience plan as domestic leisure travel has been less affected than in Europe. And will continue to be a key focus as we enter 2022,” company founder and CEO Jasper Dykes said about the raise.
Dykes added: “There’s always a temptation to put the brakes on in times of significant headwinds, but with consumer expectations continuing to shift from traditional lending towards alternative convenient digital experiences, we upheld our investment commitments into developing our technology and threw ourselves into bolstering our partnership network in the states, which is really gaining momentum.”
Despite the pandemic-induced disruption in the travel sector, the alternative lender has recovered well and is seeking to further fuel its global expansion as commercial aviation worldwide, particularly in the U.S., returns to pre-pandemic levels.
Last year, the firm launched several commercial partnerships including with Malaysia Airlines and the airline payments network Universal Air Travel Plan (UATP) dedicated to EU merchants.
The company also inked a deal with U.S.-based financial services organization and Banking-as-a-Service (BaaS) provider Cross River Bank, and through its collaboration ChargeAfter it has become the first travel-related installment service on the global platform of BNPL and point-of-sale (POS) financing for merchants.
UK Edges Closer to BNPL Regulation
In the United Kingdom, the use of BNPL has boomed in the last few years, nearly quadrupling in 2020 to 2.7 billion pounds (about $3.6 billion) in transactions, according to official data from the Financial Conduct Authority (FCA).
This has prompted repeated calls for BNPL regulation in the country, with U.K. parliamentarian Stella Creasy recently saying that the failure of the government to act quickly will have “very severe repercussions” for consumers.
The publication of an independent review in February 2021 also warned that the sector represented a “significant potential consumer harm,” prompting the U.K. Treasury to open a public consultation setting out plans for the regulation in October, ahead of a separate consultation by the Financial Conduct Authority (FCA) to develop the rules.
That consultation closed last week, and the Treasury will now review the information it gathered from relevant stakeholders and the public in order to design the scope of the regulation and ensure that consumer protection is made a priority.
Companies like Fly Now Pay Later will no doubt be targeted, but Dykes said he embraces regulation of the sector. “The category is experiencing tremendous growth and with that we also welcome the FCA’s recent decision to regulate the sector in the UK to facilitate its continuing maturity,” he said in the statement.