PayBright is a Canadian-based fintech company that specializes in providing buy-now-pay-later (BNPL) services to consumers and retailers.
In the recent past, the company has continued to expand beyond Canada. Currently, it operates in the United States and other countries. If you’re wondering how PayBright makes money, you’ve come to the right place. In this article, we’ll take a closer look at the company’s business model and revenue streams.
PayBright’s Mode Of Operation
PayBright offers buy now, pay later services, which are a simple and convenient way for consumers to make purchases without having to pay for them upfront. By partnering with retailers, the company helps consumers pay for their purchases in installments, which may be spread over six months. However, the business model has two methods that customers may opt for. A customer may decide to go for pay in 4 methods or a monthly repayment method, depending on the customer’s financial reality.
For retailers, PayBright provides an additional payment option that can help increase sales and attract new customers. The company’s platform works with retailers’ online stores and point-of-sale systems, which allows for a smooth and streamlined checkout process without hitches.
How PayBright Makes Money
PayBright, as a fintech company, makes money from different means. Some of the ways in which PayBright makes money include:
1.Merchant Fees
PayBright partners with different retailers; hence, they charge retailers a fee for every transaction processed through their platform. This fee is not fixed; it varies depending on the size of the transaction and the merchant’s business volume. Generally, the larger the transaction, the lower the fee. The fee may also vary depending on the retailer’s province, but the general principle is that each retailer partnering with PayBright pays certain fees for every transaction processed through its platform. Hence, PayBright makes money from those fees.
2. Interest On Loans
PayBright also makes money from the interest they charge on loans. When a consumer chooses to use the monthly repayment option of PayBright’s BNPL service,. Customers pay interest when they choose a monthly repayment option. The interest rate is not fixed, it varies. But it ranges from 0% to 30%, depending on the consumer’s creditworthiness and the terms of the loan. However, if the customer chooses the pay-in-four option, there’s no interest attached.
The interest charged on these loans is where PayBright makes a significant portion of its revenue. Since the company partners with multiple retailers and processes thousands of transactions every day, the interest earned can add up quickly.
3. Late Fees
Like any other lender, PayBright charges late fees if a consumer fails to make their payments on time. These fees are typically a percentage of the outstanding balance. The late fee is not fixed; it varies depending on how long you stay before making the payment. Though late fees are not a significant revenue stream for PayBright, over time, they add up to huge amounts of money, especially if there are many customers who default.
4. Referral Fees
PayBright offers a referral program that rewards customers for referring their friends and family to the service. When a new customer signs up for PayBright using a referral link, both the referrer and the new customer receive a cash reward. Although the referral fees are not a significant source of revenue for PayBright, they can help the company acquire new customers and grow its user base.
5. Processing Fees
PayBright also makes money from the processing fees they charge customers who opt for the monthly installment option. The processing fee is not usually significant but when it adds up, it becomes a huge amount of money. Meanwhile, PayBright doesn’t charge processing fees for customers that opt for pay in 4 methods.
Conclusion
PayBright is a fintech company that enables consumers to make purchases in installments without having to pay for them upfront. The company generates revenue through merchant fees, interest on loans, late fees, and referral fees.