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Spain’s Santander launches buy now, pay later platform across its markets

© Reuters. FILE PHOTO: The logo of Santander bank is seen at a branch in Mexico City, Mexico April 12, 2019.REUTERS/Edgard Garrido

By Jesús Aguado

MADRID (Reuters) – Spain’s Santander (MC:SAN) announced on Wednesday the launch Zinia, a new buy now, pay later platform it plans to roll out across its markets this year, starting in the Netherlands and Spain.

The initiative is part of a wider strategy by European lenders aimed at boosting their revenues as they struggle with low interest rates while trying to fend off competition from technology firms.

Buy now, pay later (BNPL) services have exploded in popularity in tandem with the acceleration in e-commerce during the pandemic.

However, they have drawn scrutiny from regulators over concerns they will lead to excessive indebtedness, especially among younger consumers.

The technology behind Zinia has been operating in Germany for the past year where it has acquired more than two million customers, making the bank one of the leading players in the business in Europe by customer volume, Santander said.

The lender did not provide financial details but said its expansion to other markets under the Zinia brand would help leverage Santander’s position in consumer finance, where it has 19 million customers.

Traditional banks are scrambling to keep up with fintechs, such as the Sweden’s Klarna, that are leading the market in much of Europe and the United States.

Among other markets, the platform will also be rolled out in the Nordic countries, Britain, France and Italy, and in its U.S. market, a Santander spokesperson said.

Santander said Zinia’s BNPL service offers customers the opportunity to pay in interest-free instalments in a matter of seconds, either online or through physical points of sale.

BNPL services tend to rival credit card providers in terms of the interest rates they charge.

Zinia is the first project developed by Santander’s Digital Consumer Bank (DCB), which combines Santander Consumer Finance (SCF) and its digital Openbank.

It uses artificial intelligence-based credit assessment to make real-time credit decisions with the standards expected from a regulated bank, it said.

Spain’s Santander launches buy now, pay later platform across its markets

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