In this episode of the Connector Podcast, host Koen Vanderhoydonk interviews Bettina, Head of Market Intelligence for financing products at Sopra Banking Software. Bettina explains her role, outlines Sopra Banking’s position as a software provider for both retail and B2B finance, and delves into the evolution and impact of Buy‑Now‑Pay‑Later (BNPL). She traces BNPL’s roots to long‑standing merchant credit practices, especially in Latin America, and highlights how changing consumer expectations for instant credit have accelerated its growth, positioning BNPL between traditional payments and credit. The conversation examines several risk dimensions: over‑indebtedness driven by inflation and growth‑centric economies, fintech funding models that rely on capital raises or debt‑selling, and the lack of holistic credit‑worthiness checks that can lead to consumers holding multiple BNPL obligations. Bettina notes the upcoming EU regulatory shift that will bring BNPL into the credit‑regulation space, requiring more friction, credit checks, and transparency. She advocates for open banking as a means to obtain a 360‑degree view of a consumer’s financial health. Finally, she describes how Sopra Banking can support BNPL providers through credit‑engine integration, open‑banking data, and end‑to‑end solution capabilities, and shares her personal, limited use of BNPL via a credit‑card travel feature, emphasizing the need for strong financial literacy.
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Welcome to the Connector Podcast, an ongoing conversation connecting fintechs, banks, and regulators worldwide. Join CEO and founder Koen Vanderhoydonk as you learn more about the latest available trends and solutions in the markets.
Welcome to another episode of the Connector Podcast, and today I have a guest dialing in from Amsterdam. Bettina, tell me a little bit more about yourself. Where do you work? Who are you?
Well, technically, I'm dialing in from Paris because even though this was organized through Amsterdam, I am based in Paris and I didn't speak in Amsterdam. So it is a normal—
My bet, my bet.
So my name is Bettina. I come from Panama as a fun fact. I work for Sopra Banking Software and my role is head of market intelligence for our financing products, which means that basically Basically, I keep an eye on the outside world and I bring it into the company for several different things, either to fit into product roadmaps, to build our business plans, our go-to-markets, or even sometimes to bring best practices in our marketing department or other departments. That's me. I have an engineering background and I pretty much enjoy doing this because it's about solving problems, which is my favorite part of my work. Excellent.
And what about Sopra Banking? Just a few words on what is Sopra Banking.
So Sopra Banking is one of the pieces of Sopra Steria Group, and we are what we call a software house, which means that we do software from— for banks. And we do both for retail, which is the B2C part, and then we do for specialized finance and more B2B. But we can discuss that on another call.
On another call, yeah. I think today we wanted to focus a little bit on buy now, pay later because I've heard and I've seen it with my own eyes that you made a very nice presentation at the Banking Scene in Amsterdam.
Thank you.
So how did buy now, pay later transform the banking industry?
I don't know if I would call it transform it, and I also think it's quite interesting because we talk about this like a new thing when actually it's just like marketing concept. It's a remarketing concept.
Oh, interesting.
Uh, this has existed since forever. I don't know in Europe, but at least in Latin America, we used to have that a lot in stores where the store will take the risk on credit. And I would say like, you can pay in 3, 10 times, 20 times, depending on what you were buying. Um, what it has actually— for me, I will say there are 2 things that has changed a lot. One is the expectation of the customer on how to get credit. And this will have a bigger impact outside of buy now pay later because buy now pay later actually happens somewhere between payment and credit, which is one of the reasons why it grew so fast, so quickly in a period where people needed this liquidity because I think in Europe in general, we're not as used to buy things in credit as they are in the United States or, or other countries.
Mm-hmm.
So it really grew quickly in a very specific point in between payments and credit, and it was kind of a loophole, even though, as we mentioned, it existed before. However, it is really transforming the way people imagine credit, and it is forcing banks to improve the way they imagine and they translate the customer journey for credit for customers. And I think that is going to be the real lasting impact for users and for the banks.
Well, I'm jumping a little bit around because you mentioned the difference between Europe and the USA and specifically on credit behavior. But recently, I've been reading some articles that buy now, pay later is also being used to buy a coffee, for example. And there's some reflections to be made. Is this supposed to be built as a loan thing on buying a coffee? Is that not too small? You know what I mean?
I think we need to be careful because we have come to a point where because of inflation and because of in different countries, we haven't been able to follow up with the amount of money we're paying because of course there are some countries like Belgium where they force an increase in salaries. I think this hasn't happened in all of the countries, and we have brought people to that kind of need. I think it's worrisome because we have also created a world where, because the main driver for a healthy economy is growth, we are forcing people to continue spending in things that they might not need. So that is a bit worrisome. I do not think this is supposed to come to that level because what we are pushing people is to live above their means. Even it's not what we're saying, because some people will tell you that buying now, paying later is almost a charitable thing to allow people to get things that they wouldn't get otherwise. But I think that the underlying problem is really this definition of what a healthy economy is that is built around growth. But that might be a bit—
Yeah, that is probably a different topic to be discussed about. What I hear also as a concern very often is, I mean, you're actually giving a credit to somebody, so somebody has to pay something back. There's a lot of smaller companies coming into play, fintechs. So the question is, where do they get the capacity from to pay back if the customer eventually doesn't repay?
That is another tricky one because as of today, a lot of the fintechs, and that's why the reason we saw a lot of busts in the last couple of months, are a lot of bad news around Binocular are financing these through capital raises, which is not the way we should be raising capital, uh, or supporting debt if we're gonna call it like that. Uh, some other companies are, um, what is the word for that? They are selling the debt to other companies, you know, like they're— and both of those ways of dealing with the risk is not the best. However, you need to remember that Historically, the way buy now, pay later was monetized was through the seller because it is actually for certain a way of helping the seller sell more. So it's more about the vendor than the end customer. And it is true that when people do not pay their buy now, pay later credits, it is a big difficulty for the companies that exist.
But yeah, at the end of the day, you could wonder what's, what's so different between a standard loan, right? If you take a credit, there's also a risk for prepayment. I think I think the whole idea here is that smaller companies come into play, fintech organizations, and they don't have that same bank capacity, in my opinion. So that's, I think, the tricky—
No, no, no. I think there are several things. One is that when you do a proper credit, you do a proper credit check, which means that technically you know a little bit more about the capacity of the consumer to actually repay what they're doing. And then a financial institution will normally finance themselves with something else than capital. Which helps to not get into trouble.
Mm-hmm.
And I think those are very important things. Another problem with buy now, pay later is that, and this is going to change in the coming months, is that there was no way to know how many buy now, pay later were ongoing for any given customer, which means that on normal credit, when you're in bigger credit, you will balance out how much outstanding debt the consumer has. But on buy now, pay later, you can have 27, and at the end, it's even bigger than some consumer credits, but you wouldn't know Because we do not have a record, and because if you don't get any origination process, you wouldn't even check for that kind of situations. So it's really the question about over-in-depthness that comes into play with this.
No possibility to get maxed out somehow. It's you can go deeper and deeper.
But I've been hearing less credit.
I've been hearing also companies that have a sort of procedure in place that. You only get the second buy now, pay later if the first one is repaid. So there is a kind of simple check to that extent. So talking about checks, are there like specific regulations that travel around this buy now, pay later?
As you might know, in the coming months, the European Union at least is trying to regulate buy now, pay later and is going to move from this void space in between regulations into a credit space, which means that you will have to, A, create more friction in the, when you're showing or giving buy now pay later to people. So they need to be aware of what they're doing because one very sneaky part of buy now pay later is that it's almost, you don't even have to think to get it, which makes people forget what it is. And I—
Hence the coffee example, right?
Yes. And it's worse than that. I like to put into perspective— I don't know how much of a The Simpsons fan you are, but there is this episode when— I'm glad to see that you're a very big fan. But there is this episode when the iPod just came up, and then Lisa gets an iPod. And she doesn't know because she's a child. And she gets an iPod. And she's like, you have all of the world library of music in your hands. And then she starts buying everything because music. And then after a while, she gets this Massive thing, like you own like $5,000 in music. And she's like, but why? How? I don't know. You only told me that I could get music and I was listening to it. And I feel Buy Now Pay Later has that capacity because it's like, oh, you just click here. Oh yeah, that's so nice.
Well, it's a nice comparison, I think, because it feels like candy, right? It feels like an easy escape. But at the end, I mean, if you look at what are the regulations around loans, I mean, they're in big capital letters, like say, be careful, loaning or lending money also costs money. Or what is it? Taking a loan also costs money.
This is a credit and you can only take it if you're able to repay it. Be aware there might be interest involved. So that's the second thing is like there needs to be more friction. People need to be more aware of what it is. And banks and institutions also need to be more aware. of doing credit checks and making sure that people are not going into over-debt and things like that. And that's one of the reasons and a good thing to push open banking into the scene, because open banking allows you to see through the everyday movements in a bank account whether or not a person is already on the edge of over-emptiedness.
Yeah, it's that drive to have a sort of 360 view we're all dreaming about. There's also the notion of the Data Governance Act that also allows or promotes, if you want, more data collaboration amongst entities. It's not necessarily about the banks, but it could be also applicable on the banks. Now, you earlier described Sopra Banking as a software provider. So where do you guys come in in this whole story about buy now, pay later? Where can you add benefits?
So we have several places where we can help. We do support some of the biggest buy now pay later companies because we historically are credit companies and some companies always store the buy now pay later within credits. We also do open banking and we have partners where we use to this part of credit checking. And of course we could probably potentially more than probably help you on an end-to-end journey, but then that it depends on what you're looking for.
So I guess that the best advice would be is to contact you, Bettina.
Of course. You can always contact me for all of your questions about how we can help you solve any of your banking problems.
Oh, nice. Super nice. We're almost at the end of our conversation. Time flies always very fast when you're in a podcast. So maybe one last question for you, Bettina. Are you a user yourself of Buy Now, Pay Later?
Good question. I rarely do it. I mainly use the version on my credit card. It is specifically for traveling. And it is true that it's more because it helped me think that I spent less money. And I'm very glad to only use this within that scope because, as I said, you need to have a very good financial education to be able to understand what you're doing with this kind of thing. So it shouldn't be just about promoting consumption. Which is a very tricky one.
Yeah, yeah. I actually 100% agree what you say there. It's about consuming less instead of consuming more. But that, that again is a different topic. Bettina, thank you so much for joining us in the Connector Podcast.
Thank you for having invited me and always lovely to have these discussions with you.
Thank you so much. Bye-bye.
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