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Malaysia’s Rising BNPL Provider that Overcame the Odds: The Journey of Split

The adoption of Buy Now, Pay Later (BNPL) is now visible in nations across the world. In 2020, BNPL accounted for 2.1% of $97 billion of global eCommerce transactions. The figure is expected to double in the coming years, particularly in the APAC region, where the pandemic has resulted in consumers embracing eCommerce and digital wallets. A rising player driving the adoption of BNPL in Malaysia and Singapore is Split. 

Since April 2020, the company has signed up 1000+ brands, generating multiple millions of USD in sales for them. But this success resulted from a long journey where its founders conquered many challenges. But now the future looks promising as Co-Founder and CEO Split Dylan Tan believes, “We’re still in the early days of BNPL in Asia. There’s still so much to be done, but the potential is vast.” 

Split’s unique approach to Buy Now Pay Later

“We believe that in the modern era, credit should be easily accessible to all in a fair manner. Particularly, for those in vulnerable low-income groups,” says Dylan describing the philosophy of Split. The mass adoption of Split can be traced back to this driving principle. Moreover, it has guided the company to develop a unique approach to the BNPL model that’s equitable to all. 

An accessible shariah-compliant source for credit

Being a fully Shariah-compliant platform, Split allows consumers to spread purchases over interest-free instalments across their multiple salary cycles. Importantly, this process is entirely free without any penalties for late payments. Instead, Split makes its money through a commission paid by the merchant for each sale through its platform. It’s a move that aligns with their ethos of making credit accessible to all. 

Further, it’s a bold departure from many traditional BNPL approaches. Elaborating their decision, Dylan shared, “Contrary to popular belief, the existence of late fees doesn’t deter late payments. We’ve found that such fees affect two types of customers from our data. The first are those with no intention of paying back, and even the highest late fees won’t change that. Whereas, the second type are honest consumers who have every intention of paying but have hit hard financial times and need some time.” 

He continued, “So all late fees serve to punish honest consumers with good intentions disproportionately. That’s why we decided to forego late payment fees. We believe that such measures reflect a poor credit risk model. As a fintech platform, you don’t need to charge punitive fees if you’re good at assessing risk. It’s also reflective of our values at Split to make credit accessible. We’re not going to make money by punishing people for financial hardship. Instead, we succeed when our consumers and businesses succeed.”

How Split is helping businesses succeed 

By taking this refreshing approach to credit, Split has eliminated any hesitation or negative sentiment around the idea of credit. This bold step has accelerated consumers’ adoption of the Buy Now Pay Later model, translating into increased sales for its many businesses. Today, the platform is utilised by leading brands in Malaysia, including Apple and Dyson. 

Speaking to Arteculate, Dylan shared an example from the fashion industry to show the tangible value Split offers businesses. Fashion retailers typically see a significant spike in demand in the days leading up to the Hari Raya holidays. During the 2021 holiday season, Malaysian fashion brand Zoffya added Split to its website as a Buy Now Pay Later option. The move was so successful that Zoffya saw a triple-digit percentage increase in month-on-month growth. If you go through the retailer’s social media posts, you’ll now see that BNPL has since taken centre stage as a critical selling point for the brand.  

The benefits of BNPL, as this scenario shows, are twofold. First, for businesses, it offers them access to a brand-new customer base who may, previously, not have considered the option of making a purchase. On the other hand, it democratises e-commerce by offering access to credit to people. Thereby allowing them to make purchases that may previously have been inaccessible to them, which helps boost local retail economies. 

The fast-paced journey of Split

A snapshot of the team behind Split

It takes a rare combination of personalities to build a company together. Rarer still to do so without implosion upon meeting any external friction. The dynamic duo, Dylan Tan and Vishvesh Suriyanarayanan, were brought together during sessions organised by Entrepreneur First. “We had complementary personalities and instantly clicked,” recalls Dylan, which let them begin work on the first iteration of their startup. 

This first iteration of Split sought to offer BNPL services for travel tickets. “People book their trips months in advance but had to pay for the entire ticket fee upfront,” said Dylan describing the original problem they sought to solve. However, this idea seemed doomed to fail with the onset of the COVID-19 pandemic. 

Despite the odds, the duo pivoted to find a new product-market fit, and in April 2020, they made the decision to expand into eCommerce and retail. The founding pair successfully navigated the pandemic quickly secured a long list of renowned household brands across several verticals. However, that’s not to say they didn’t face and overcome their fair share of challenges. 

The duo was taken by surprise with their initial success. “People were adopting it much faster than we anticipated. It was like flying a rocket ship while studying the manual. So as we scaled, there was so much we had to learn to meet the demands of our users and even now, we are still learning,” says Dylan describing their fast-paced journey.

The silent struggles of entrepreneurship

Any founder will tell you that it’s an exhilarating feeling when the rocket ship that is their startup is growing. But, unfortunately, few will tell you that along with those fantastic highs are depressing lows. 

The harsh reality is that building a company is a stressful and daunting undertaking. It takes a heavy toll on the mental health of founders. The U.S. National Institute of Mental Health states that 72% of entrepreneurs are directly or indirectly affected by mental health issues. Alas, the glorified myths around startups have left founders with no safe space to open up about their struggles.

Opening up about their challenges, Dylan shared, “As a founder, you’re often tasked with having to put a face of strength. We tend to invest so deeply into building the company that we attach our personal happiness to it. This ends up being dangerous when going through difficult times. In such times founders may struggle with painful feelings like anxiety, depression, and even suicidal thoughts. Even for us, there were tough moments that took a heavy toll on our mental health.”

With success being glorified and failure being a taboo (especially in Asian societies), most founders don’t know where to go when they’re struggling mentally. The first step to fixing a problem is admitting it exists in the first place. Fortunately, there are promising signs on the horizon. As more founders open up about their struggles and society becomes more aware of the importance of mental health, more resources are available for those in need. 

One such example is the efforts by 500 Startups, one of Split’s investors, and as far back as 2017, prioritised the mental well-being of its founders. Sharing his own experience, Dylan said, “We consider ourselves lucky to have a supportive VC like 500 Startups that prioritises the mental well-being of founders. So today, I know that there’s help available if I’m struggling. While there’s room for improvement, it’s welcoming to see more spaces being made available for founders to open up.” 

The future of Split and Buy Now Pay Later in Asia

Looking towards the future, Dylan believes that BNPL is poised to be a solid alternative to credit cards and loans. Of course, there’s a long way to go before dethroning credit cards. But the trend is growing in popularity as it rides the eCommerce wave. Over time, however, the applications for BNPL are far-reaching beyond the glitzy digital retail storefronts. 

“Whether it’s a pair of shoes or a motorcycle or an education loan, we want to be that provider of them. The Buy Now Pay Later model Split has built a blueprint for all those needs. Moreover, it can be done digitally in a fair, transparent manner, without punitive fees. That’s the important gamechanger as we make credit accessible to all,” said Dylan describing the future.

Of course, a fast-growing industry means increased competition is on the horizon. Yet, Dylan remains unfazed by this idea. Instead, he welcomes it as more players in the BNPL space means increased adoption by consumers and businesses alike. All the while, he boldly states that Split is committed to its vision of “Being the one place where consumers can finance anything they want to build fulfilling lives.” 

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