Member Article

The UK financial services market continues to attract innovation from around the world

The UK retail banking market has been “under attack” for some time whether it’s a new online-only bank or mobile payment app, and considering how much is bought online these days it’s no surprise that innovative new e-commerce payment alternatives continue to join the market. Founded in Transylvania, Beez is one such millennial friendly app providing an alternative to the “buy now, pay later” model with no interest, no late fees and no commission. Crucially it also rewards shoppers with cashback, which research [source: Buzzing Facts] confirms is the most popular reward amongst credit card holders, as part of the its mission to disrupt the sector from the ground up.

Co-Founders Lucian Cramba and Tamas Vasile had both started their careers in marketing, and so were aware of the large budgets allocated to acquire customers and keep them loyal. “At the same time, we saw 70% of credit card owners end up paying interest and often at eye-watering levels in order to buy products from these same retailers. We believed there was a way to help retailers decrease their marketing spend, and at the same time help their customers reduce the cost of financing,” says Cramba. It has already established partnerships with over 2,000 shops including Asos, booking.com, Ali Express, Qatar Airways and Kauffmann in the UK.

With over 110,000 users and more than 2.5m EUR in transactions completed through the platform to date, Beez raised finance to support their international expansion, with the UK an obvious first target market, with many contributing factors: a mature ecosystem in terms of e-commerce and credit card usage; the growth of online spending, driven by the proliferation of smartphones and tablets; card payments overtaking cash as the most popular form of payment and the growing use of credit cards to shop online which is estimated to be worth £220 billion [source: Tender Capital].

“In general, though, APR rates are still very high (compared to the UK’s very low interest rate) and although consumers seem to be getting smarter about how they spend on credit cards, using them for the rewards and protections and repaying balances before incurring interest, the default rate on UK credit card debt (in April 2019) was at its highest for two years. We provide access to credit and rewards to the credit card user. This eliminates the cost of financing and means that the consumer receives 5-10% from the retailer as a commission for a purchase that will add up to 30-60% yearly on loans capital,” said Tamas.

This was posted in Bdaily's Members' News section by Beez .