With Galileo’s new Buy Now, Pay Later (BNPL) solution powered by Mastercard, you can offer your customers flexible installment loans to help pay off large and unexpected purchases. Customers receive a loan directly from their bank, rather than using a third-party service at point of sale or adding to their credit card debt. You can offer Galileo Buy Now, Pay Later to consumers and businesses.
You have strong flexibility in how you design your BNPL offering. Galileo works directly with you to determine the varying terms, including the number of installments*, frequency of repayment, fees, etc. that meet your business requirements.
Here is a brief overview of how BNPL works:
- You pre-approve a customer to make a one-time purchase using your BNPL service, with a minimum purchase amount of $50.
- You present an offer with flexible payment terms in your application.
- Upon customer acceptance of the offer, you issue a single-use virtual card which is provisioned to the customer’s mobile wallet of choice.
- The customer makes a purchase using the single-use virtual card.
- Once the customer uses the card, it is removed from their wallet and is unusable by the customer.
- You create a loan that the cardholder will pay off in installments at the defined schedule in the offer.
A single parent unexpectedly needs to replace their dishwasher at home. They have not budgeted for a significant purchase and are weary of adding to their credit card debt. Instead, they apply and are approved for a single purchase of up to $500 through their bank’s BNPL service. This allows the family to buy the new dishwasher today and make payments on the purchase amount in installments.
Wilderwood Bakery’s commercial grade oven broke down unexpectedly. The oven is essential to their core business as a bakery and the owner is forced to temporarily close. The owner estimates that a new oven would cost approximately $10,000.00. Cash flow is tight and the owner is hesitant to add to their credit since he would need to pay it off in full in his next statement. He reaches out to his financial institution to explore his other options and learns about BNPL installment repayment options for SMBs. He applies and is approved for the full $10,000.00, to be paid off in installments over 12 months* with a 4.66% fee rate. This breaks the payments into smaller more manageable amounts that he can forecast in his monthly budget. Each month, he owes $784.79 in principal and $87.38 in installment fees. He purchases the oven at a restaurant supply company using the single-use virtual card issued to him by his bank and the bakery is open and operational the following weekend.
Galileo Buy Now, Pay Later can benefit your business in the following ways:
- Easier entry into the BNPL market — Integrate BNPL services into your existing products using Galileo’s Program API.
- No merchant network required — By default, the single-use virtual card issued by Mastercard is accepted where Mastercard is accepted unless a merchant has opted out.
- Control over underwriting — You can make underwriting decisions based on your own customer knowledge and risk tolerance, rather than relying on external BNPL providers.
- Loan management — Galileo manages your installments loans and offers the flexibility to add incremental pricing and edit the loan frequency and duration.
Galileo provides a platform for you to offer an on-demand BNPL solution to your customers. Galileo has built two key products to offer a complete BNPL offering:
- Single-use virtual cards — Instant issuance of a virtual card powered by Mastercard Installments program. See Setup for Single-Use Virtual Card for more details.
The single-use virtual card can be offered as a standalone solution if you already have loan servicing capabilities.
- Installment loans — Loan creation with payment schedule, repaid in installments. See Setup for Installment Loans for more details.
Additionally, Galileo also provides reporting and controls for you to monitor BNPL activity.
For single-use virtual card, Galileo offers:
- Card transaction reporting — Posted transactions are reported daily via RDF.
- Real-time events reporting — Galileo reports posted and pending card transactions in real-time via the Events API.
- Authorization controls — You may participate in authorization decisions via the Auth API.
For our installment loans product, Galileo offers three daily reporting file exports:
- Daily Loan Status — List of the current loans, subproducts, statuses, and installment due dates.
- Daily Transaction — Details on daily transactions related to loans.
- Daily Loan Installments Status — Details on the status of the installments.
*Programs with over four installments or whose customers are incorporated businesses rather than consumers, may be subject to additional lending regulations and consumer protections, including Regulation Z and state lending laws. You assume all risk and liability arising from your use of Buy Now Pay Later solutions and are solely responsible for compliance with applicable federal, state and local laws, regulations and judicial and administrative decisions, including but not limited to, any applicable state and federal commercial lending laws.
Updated 27 days ago