Buy Now Pay Later: An Exclusive Interview with Pace
Buy Now Pay Later (BNPL) platforms have been growing significantly in numbers over the past few years and increased during the COVID-19 period. While it has been growing worldwide, especially in the USA, this platform is new to Singapore. Do check out our previous article here to find out more about BNPL and the players involved!
This platform, however, has come under scrutiny with authorities globally reviewing and tightening rules around the industry. Some regulators are saying that technology companies offering BNPL should be regulated like ordinary lenders. In Singapore, MAS (Monetary Authority of Singapore) has launched a media campaign warning the payment methods may lead to debt and consumer credit risk.
To understand more about this, we spoke to one of BNPL's main players, pace. Launched in 2020, pace strives to be a merchant-centred platform, catering to 3-month instalments for local products. We sat down with Daren Goh (virtually), Vice President of Growth, to talk about pace and why BNPL is a big deal.
How did pace begin? Who started it all and what was the main goal for pace?
Turochas "T" Fuad is a renowned entrepreneur who founded 3 companies before pace. I met T back at our previous company, Spacemob. Spacemob was a co-working space company that was expanding before being acquired by WeWork, which we moved to before starting on pace. Before Spacemob, T was working on a company called Travelmob, a vacation retail marketplace.
We see ourselves as a Fintech company, with BNPL as our first step. We found it exciting to build companies from scratch and grow it exponentially. As such, we would like to expand to other financial areas generally.
What dynamics or relationship strategies did Turochas “T” Fuad bring to pace?
I think we do have a typical proper dynamic as seen in new and growing companies, with T being the Chief Proponent, Chief Advocate and focuses on long term goals such as investments and major deals. I handle the operations side, ensuring merchants are taken care of properly, as well as how to drive transactions with merchants.
How’s the working environment like as a start-up?
Early-stage companies like us are motivated by freedom, creativeness and possibilities. Rather than just micromanaging things out in minute detail like a large-scale company, having an environment where we can do what we need to do is probably our biggest point. That’s a common thread amongst most of our team. Also, having this kind of practical and hands-on environment as a team means that whatever problem or issue we will face wouldn’t be blamed on anyone, and the goal is just to fix them every day and enjoy the process.
Will you say that this cohesive environment is the reason why pace is succeeding as an early-stage company?
People are your strategy. When you’re running a team and multiple people are doing multiple things, the attention to detail or the drive for excellence will only come when someone is motivated. If you get the right people and set the right tone, you will probably have a high chance of succeeding in the start-up you are in. You have to ensure the people you are with enjoy both failure and success, and that will be how you keep the company alive.
Why choose BNPL as your first payment platform?
There is quite a market demand for the BNPL platform. Like most tech products, they gain traction in a big country with a more homogenous society and ethnicity and culture. Singapore is a tough market, as it’s small and fragmented. However, if something takes place in the United States, it sweeps across the world. There’s plenty of BNPL examples across the world like AfterPay, Affirm, which is working well in their own countries and is now spreading to more countries after that to reach out to more customers.
There’s no leading Asian player yet, and it’s a race to be one. However, unlike other markets, everyone is not exactly fighting in this market. Everyone has their niche, everyone has their strategy so there’s no overlap or dominance between competitors. This is pretty obvious in the fintech market, where there are multiple players and always a shift in the market share.
This is the best time to jump into the BNPL market, with COVID-19, younger people are more conscious of the cash and parents are smarter now. Alternative payment methods such as pace, and even GrabPay has been around for quite a while but due to COVID-19, things have picked up.
What sets you apart compared to the other platforms?
First of all, and I can't stress this enough, we have a great team of proven entrepreneurs. We’ve done two companies, expanded and bought over by bigger companies, so we do have quite a bit of experience.
We always believe in putting merchants first, like how we do our marketing strategy. Our colour scheme and ads are basic and neutral, and it was intentionally chosen as we want us to be in the background. We like it that way as having these neutral grey colours will allow the merchant’s products and their key strategies to be upfront and the star of the show. This shows our belief in being the platform for merchants, less so being an engine that pushes products to people. Essentially, our goal is to orientating towards merchants, supporting them and helping them grow.
There has been some discussion recently about the risks of the BNPL platform. Would you mind sharing your thoughts about it and what are actions being taken?
We are obviously very conscious of the risks and disadvantages of the platform. Anything can be a tool, even the BNPL platform. The choice really is in the consumer’s hands. We try our best to ensure the consumer is always well informed before making a purchase decision, such as showing their pay limits (S$1,500 cap on debit card purchases and a S$3,000 limit on credit card transactions), do background checks to ensure we don’t give much to those who can’t afford it, and we only accept official bank credit/debit cards.
Really, the conversation everyone is having at the moment is how much to give an 18-year-old who does not have a stable income. Having these platforms would be able to start a learning process on how to manage their savings. The best we can do is to issue credit that’s appropriate for the person's age and budget.
In the purest form, we help to split payments into several months. If you can’t afford it, you shouldn’t buy it.
What are pace’s next steps in the coming months to years?
Right now, plans are developing and will be announced soon, but what we can say is that one of our main focus points is to expand to more countries. Right now, we are available in Singapore, Malaysia, Thailand and Hong Kong. We’re looking to expand to other countries, especially North Asia for example.
What are the challenges you’ll be facing?
Well of course as a startup, some of the challenges we’ll be facing will be resources and demand, as well as staying true to the path we’ve started. Our main goal is always to serve and help the communities around the world we will be in. It’s always a challenge to stay true to what our goals are, but that is something that we can always strive towards.
We would like to thank pace, Daren Goh and the rest of the team for their collaboration in making this article possible. If you like to find out more about them, check out their website at https://pacenow.co or their social media for promotions and new stores coming soon!
pace now has a brand new promotion. Celebrate Singapore with pace and win over $12,000 worth of prizes from favourite brands such as Ox Street, Benjamin Barker, Goldheart & many more. Stand a chance to be the lucky winner of the Grand Prize of $4,000! Visit their website for more details.