“If you look at it, it’s an alternative to credit cards, especially for millennials and Gen-Z users as they have trouble getting access to credit,” said Afif. “If you are graduating as a student or you have just relocated and want to buy furniture and don’t have credit history, that’s where where we come in.

“It is an alternative to credit cards…”

“Early indications show customers are willing to spend more when using the service, ranging from 5-20 per cent more than other payment types,” said an Al-Futtaim Retail spokesperson.

It was introduced on its online shopping portal muudha.com and also at its watches and jewellery platform. Since then, Al-Futtaim Group brought the service to some of its brick-and-mortar stores, such as Toys R Us and ACE Hardware and “with plans to launch with other Group brands in retail and automotive”.

In fact, Al-Futtaim has been offering BNPL options at its IKEA store in Egypt via a partnership with ValU for three years. “The Group is also planning to launch BNPL in Singapore and Saudi Arabia before the end of the year to improve the shopping experience for consumers,” the spokesperson added.

“Every retailer that we approached is interested – and we don’t ask for exclusivity,” said Afif. “They can choose more than one BNPL provider. The choice then goes back to the end customer and which BNPL provider they prefer based on the quality of the service and, of course, the financial product offering.”

The customer needs to have a credit or debit card on file and the purchase price can be split over 3- 6 months at zero cost. “The credit card on file offers some security to us,” said Afif. “But if the customer misses a payment or for some reason the credit/debit card defaults, cashew will charge a late payment fee and eventually take on the risk of defaulting.

“For this offering we are getting a small margin from the retailer. The fees that a retailer would typically pay to a PSP (payment service provider) will be paid to us instead, and we will split that fee with our acquiring bank.

“We want to promote responsible spending as well. All the fees will be displayed upfront and there are no hidden charges whatsoever.”

It also has the full sign in from banks, because BNPL creates spending opportunities that banks can lend for, with fintech companies acting as the catalyst.

“We provide the technology, the platform and the customer acquisition while banks provide the knowhow, experience, and lending ability,” said Afif. “Our goal is not to fully replace the bank or their products but to accentuate their lending offering.”

Another entrant is Spotii, which launched earlier this year in the Kingdom and allows shoppers to make their payments in four instalments at zero interest. The partner merchants receive the full payments upfront from the fintech company.

“We believe Spotii helps empower customers to enjoy shopping more, without worrying about excessive costs or hidden fees,” said Ziyaad Ahmed, co-founder.

But aren’t fintech companies meant to replace credit card companies in consumer transactions?

That’s definitely not how Hosam Arab, co-founder of tabby and also one of the key players behind the fashion portal Namshi, sees it. “On the contrary, our interests are very much aligned as both tabby and Visa look to shift consumer spend away from cash and towards digital payment methods. Given the clear value we provide in offering customers interest-free instalments for their purchases, these customers are increasingly reducing their dependence on cash-on-delivery and becoming more comfortable using their cards to make their online purchases.”

We want to empower our customers to easily buy what they want, when they want, while remaining in control of their finances

– Hosam Arab of tabby

As far as UAE shoppers go, these partnerships are not their focus. What they will be focussed on is whether they have the budget to make the payments on their next purchase. With the gifting and promotions season on, that is what’s grabbing their attention.

If they can make those buys now and pay later, then they won’t have any quibbles. The force is truly behind BNPL…