Buy now, pay later (BNPL) startups are proliferating around the world and the Philippines is no exception. Today, one of the country’s biggest BNPL providers, BillEase, announced it has raised an $11 million Series B. The round was led by BurdaPrincipal Investments, the growth capital arm of Hubert Burda Media. Other participants included Centauri, a joint investment vehicle between MDI Ventures and KB Investment, and Tamaz Georgadze, CEO and co-founder of Raisin DS.
Operated by fintech First Digital Finance Corporation, BillEase launched in 2017, with shopping marketplace Lazada as its first merchant partner. It can now be used at more than 500 merchants, including consumer electronics seller Kimstore and Philippine Airlines. Its BNPL is also available through payment gateways Xendit, Paynamics, 2C2P, Dragonpay and BUX, and it offers an app with personal loans, top-ups for digital wallets like GCash, PayMaya, Coins.ph, GrabPay and Shopee Pay, as well as mobile phone and gaming credits.
Since the Philippines’ payment sector is fragmented, customers can pay back their BNPL loans a variety of ways, including digital wallets, bank transfers, direct debit, linking their bank account or over-the-counter payments in physical stores like 7-Eleven.
The new funding brings BillEase’s total raised to about $15 million in equity, and will be used for customer acquisition, developing new products and hiring.
One of the main ways BillEase differentiates from other BNPL services in the Philippines is that it allows customers to build formal credit records.
Georg Steiger, First Digital Financial Corporation’s co-founder and CEO, told TechCrunch in an email that BillEase’s target segment is the Philippines’ emerging middle class, specifically Gen Z and millennials who are early in their careers. “About 80% of our customers are new to the formal credit system and do not have a credit record.
For those customers, BillEase also serves as an on-ramp to the financial system — we are the only credit app in the Philippines that is a member of TransUnion.” It is also part of the state-owned Credit Information Corporation.
Another differentiator is that BillEase built and owns its credit, fraud and payment software stack, and can approve more than 90% of BNPL loans instantly with it model. This means shorter checkout times and also enables BillEase to offer lower interest rates, at about 3.49% compared to 7% to 12% for other BNPL loans, Steiger said. It gives merchants customizable installment plans. For example, they can offer BNPL repayment terms of 10 to 30 days for smaller purchases, payment in four installments or monthly payments for larger purchases, and decide if those loans will be interest-free or not.
Becasue most of BillEase’s customers don’t have a credit record, it uses “a wide variety of alternative data sources to triangulate and get a good picture of our customers,” including telecom usage, phone metadata, network data and behavioral data points,” Steiger said.
“Credit scoring is also something we constantly tinker with,” he added. “As new data comes in or new variables become available, we upgrade our models. At any given time we usually run a few A/B tests to test new models or process improvements.”