Certegy, an automated clearing house (ACH) payments provider and risk management company, introduced a white label buy now, pay later (BNPL) offering where merchants can leverage application programming interfaces (APIs) to deploy their own merchant-branded BNPL option, according to the company’s press release on May 20th.
The payment option is targeted towards mid-market companies where merchants can create their own BNPL payment option on Certegy’s ACH payment rails and don't have to rely on companies like Afterpay and Klarna for the payment option.
“We were evaluating what was going on in the industry and saw an opportunity – a merchant-friendly and merchant-focused, buy now, pay later solution,” Greg Lipari, vice president of strategy and commercial development at Certegy told Payments Dive in an interview. “I think a lot of the offerings out there are very focused on acquiring the consumers and we wanted to enable our merchants to offer that same benefit to customers, without having to ultimately hand over the keys of the customer journey and lifecycle to another company.”
Long-time U.S. payments processing company Certegy is rolling out a new buy now-pay later service to take aim at international BNPL giants eying the U.S. market.
Merchants can now create their own buy now, pay later payment option at checkout using the new Certegy option, eliminating the need to partner with BNPL companies like Sizzle, Afterpay and Klarna. The new BNPL white label offering from Certegy can help merchants take control over their customers’ checkouts while reducing transaction costs and payments risk.
St. Petersburg, Florida-based Certegy, a 60-year-old company, says it has been in the business of providing check warranty and authorization services for years, but this most recent merchant white label option was rolled out last month.
Certegy clients include retailers like Target, TJ Maxx and Publix, an employee-owned supermarket chain. The company also works with car dealerships, and plans on expanding its BNPL services to the auto industry, Lipari said.
When the merchants use Certegy’s interface to integrate a BNPL payment option, the customer is not redirected to a different company’s checkout gateway. The offering will leverage Certegy’s BankPay payment technology to directly link a customer’s bank account to their online retail wallet.
“We're able to link a consumer's bank account from the offset to a different payment method [ACH payments] that is gaining traction in the U.S.,” Nicholas Beardsley, Product Advisor at Certegy said.
Once enrolled, customers are recognized at every Certegy-supported merchant when making future purchases. The payment option helps reduce transaction costs and risk for merchants while providing safe payments for customers, Beardsley said.
The merchants are charged a transaction fee on each transaction between 1% and 6%, depending on the industry, Lipari said.
If a customer qualifies and is approved, based on Certegy's data and algorithm reviews, the merchant is paid the full amount immediately, Certegy Chief Marketing Officer Sarah Guckes told Payments Dive. “So, the merchant has no risk and if for some reason something happens that's on Certegy, but we have great data and we make really good decisions at the point of purchase as to who will qualify for it.”
Certegy’s BankPay technology platform processes $2 billion in ACH transactions annually for more than 4,000 retailers, corporations, and financial institutions at more than 100,000 retail locations, the company said.
Certegy, a 60-year-old company has been in the business of providing check warranty and authorization services.
Klarna, a Swedish BNPL company that debuted in the U.S. in 2015, has amassed 11 million US shoppers in 2020, a threefold increase from 3.6 million monthly U.S. shoppers in 2019. The company’s sales were boosted during the pandemic as retailers put their focus on “leveraging the key channel they have available-online," David Sykes, Klarna's Head of U.S. operations, said in a press release last year.
Afterpay, an Australian BNPL company announced that the company amassed five million active monthly users in May 2020, two years after its debut in 2018.
“We have been offering the BNPL payment option for years under the name of hold check, which is effectively the same thing – someone literally writes a check at four different points in time and we hold them and cash them in as the day progresses,” Lipari said. “The BNPL is just the digital version of the same offering and we are well poised to serve the market with our products.”
Certegy also provides risk management and ACH payments for e-commerce sellers. During decades of operations, the company collected huge swaths of consumer financial data and can help merchants in understanding the risk factor associated with a customer, Lipari said.
Certegy had been a subsidiary of Fidelity Information Service (FIS), but then in 2018, Variant Equity Advisors, an investment management company, acquired Certegy from FIS for an undisclosed amount.