As part of parent company Advance Intelligence Group, Atome launched its BNPL operations in Singapore in December 2019. In a matter of months, and perhaps in one of the most challenging periods in retail history, Atome has made significant headway, says CEO David Chen.
“Within a very short time of less than a year, we have been able to catch up to our competitors… I believe we are the biggest BNPL platform in the region,” says Chen in an interview with The Edge Singapore.
From 500 merchants in July 2020, Atome’s partners have swelled to some 2,000 in Singapore, with the likes of Sephora, Zalora, Agoda, SHEIN, Zara, Marks & Spencer and IUIGA joining Atome’s platform. In total, Atome is accepted by some 3,000 merchants in the region.
“I’m pretty confident that we can grow even more and even faster, not only in Singapore, Malaysia and Hong Kong but also in other places,” Chen adds. According to Chen, Atome boasts some 20 million users in the region. Outside of Singapore, Atome is also active in Malaysia, Indonesia, Hong Kong, Thailand, Vietnam, the Philippines, Taiwan and Mainland China.
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While Atome and other similar services may draw inspiration from Afterpay or Klarna, tweaks have been made to suit the Asia market, like having monthly payments instead of bi-weekly payments to match the frequency of paychecks here, says Chen, who holds a PhD in computer science from the University of Washington.
Among consumers, the BNPL solution has proven most popular among young consumers; 70% of Atome’s users are between 23 and 38 years old.
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Atome’s figures also suggest that these millennials in Asia may not own or use credit cards. Among its Singapore users, 60% to 70% have linked a debit card to make their payments, says Chen.
But these have always been the target users of Atome, says Chen. “They are young, they are mobile-first and they are eager to explore new things. They are also underserved by banks, [compared to the] 40- to 50-year-olds who have a well-established income record.”
At registration, a risk management system assigns a credit limit to users based on details like their age. Spending limits generally range between $1,000 and $3,000, says Chen. “In some countries, we also access national bureau data, such as in the Philippines and Indonesia, so we can access their previous financial records.”
Atome may be offering a friendly, interest-free payment option for their young users, but to discourage late payments, it suspends users who miss a payment. Users are charged $20 to reactivate their account after the overdue payment has been settled.
According to the firm, less than 1% of its user base have missed payment, with an average overdue amount of between $30 and $60.
As Atome’s launch coincided almost exactly with the outbreak of Covid-19, Chen has seen the effects of the pandemic on both sides of the retail industry. “On the consumer side, you can imagine some countries seeing higher default rates, but on the other hand, it’s easier to acquire merchants. Traditional retailers [and] offline merchants all suffered from Covid-19. [With] low traffic and no tourists, they are more willing to adopt new things,” says Chen.
The switch to Atome has also bode well for them, says Chen. Atome reports an approximate 20% increase in conversions and a 30% average increase in order size among participating merchants. Chen adds that these figures are averages, and the increase in order value can exceed 50% for some merchants.
In addition, Atome’s partnership with home decor and lifestyle retailer IUIGA last year revealed the potential between merchants and payment services. The IUIGA x Atome Exclusive Day rewarded customers who chose to pay by Atome with deals such as $10 off at IUIGA’s physical stores. “That single day, we improved [IUIGA’s] number of transactions by three times,” says Chen.
Since graduating with a degree in mathematics from Fudan University in Shanghai, Chen’s 20-year career has seen him conduct research for Microsoft and Yahoo in San Francisco, and teach as chair professor and tenured associate professor at Shanghai Jiaotong University and Nanyang Technological University respectively.
More recently, Chen entered the start-up space here, founding job portal Matchimi in 2013 and lifestyle app Nestia the following year. Today, Chen also serves as chief product officer of Advance.ai, a sister company to Atome, which provides financial services to some 1,000 banks, fintechs, multi-finance companies and ecommerce platforms. Both companies are units under parent company Advance Intelligence Group.
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Atome may have started with some 30 staff plucked from Advance.ai, but the company now has 300 employees. “Everything is built in-house. We have a few hundred engineers, data scientists and analysts to build these technologies and solutions. So, this is something we are extremely strong in,” Chen says.
Looking ahead, Chen is excited to bring Atome to more Asian markets. “At the end of the day, I believe so long as our products, our service, our price, all of them are better and cheaper, we will be able to get more market share,” he says.
