For Shopback, what started out as an online cashback platform in 2014 has morphed into something much bigger.
In December 2021, Shopback completed its acquisition of “buy now, pay later” (BNPL) platform Hoolah, marking its foray into the financial services space.
The company furthered this venture in January by launching Shopback Pay. The in-app feature rewards users with discounts when paying with associated digital wallets, such as GrabPay, at over 2,000 participating merchants islandwide. Shopback is not only acquiring companies, but talent as well.
That same month, Shopback appointed Hamish Moline as its managing director of financial services, and he now leads the development and rollout of Shopback’s commerce-related financial services.
“Shopback already had a vision to go this way, so that happened prior to me joining. In fact, that was part of the reason I joined, because [co-founder and CEO] Henry Chan and the team had a view of where this could go,” Moline tells The Edge Singapore. “Having watched other things around the world, my job now is to shape it and say: ‘What really makes sense? And what should we do next?’”
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Moline joins from the Australian-listed BNPL giant Zip Co, where he served as chief commercial officer and managing director, Asia and global payments. Prior to that, he held key leadership positions in Visa, PayPal and eBay.
Moline shares a couple of objectives for Shopback’s financial services division. “First, to scale up our instalment business. For certain things, paying now works very well, like groceries and food. BNPL, meanwhile, has worked very well for fashion and beauty, and some home categories.”
He wants to extend the BNPL service to bigger-ticket purchases, such as travel and electronics. “These require other products, like longer instalments of six to 24 months, or potentially, an insurance product. We also have customers who are sitting on a balance from their cashback, and we could, in theory, go into micro-investments, or things that they can do with their cashback.”
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While these are not solid plans, Moline believes Shopback’s users want to do more with the platform. “The way we think about this is through stages of life. What we really want to do is provide products for their customers as they grow. There’s natural progression, from a user’s first job, first rented house, then marriage and buying a house and furnishing it, then buying things for kids. What we’re doing is looking at those verticals, and targeting those customers based on what they’re doing at that time.”
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See: Buy now, pay later, party over?
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Similar to Pace’s focus on hospitality amid a return to tourism, Moline sees greater opportunities in travel. “We’ve launched BNPL services for Malaysia Airlines. That has been strong, particularly at the moment when travellers are coming back.”
He adds: “We’re also talking to a couple of hotel chains. Shopback’s traditional business has been very strong with the travel aggregators like Agoda, and Booking.com, so they’re the merchant segments in travel and entertainment that we’re looking to work more closely with.”
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Last October, Shopback snagged US$40 million ($55.7 million) in a funding round led by Temasek, East Ventures, Indies Capital, EDBI and January Capital. Temasek had earlier led a US$75 million round into the company in March 2020.
In February, Bloomberg reported that Shopback is in talks with Morgan Stanley to raise US$150 million to fund expansion plans. The rumoured round will value the company at about US$1 billion.
Market share
Banks are going to struggle to become shopping destinations, says Moline. E-commerce may lend itself readily to digital solutions like BNPL, but with QR codes offering cashback through digital wallets, even offline point-of-sale (POS) transactions could soon circumvent traditional banking products like debit and credit cards.
“This is going to grow and it is going to become universal,” says Moline. “Banks will provide instalment solutions themselves, for sure, but there’s a difference with our focus and what we’re trying to do.”
“We’re not trying to become a bank,” he adds. “We’re building delightful shopping experiences that have the option when you check out to pay now or pay later, in a way that you choose.”
As competitors here and abroad jostle for market share, Moline warns against growth for growth’s sake, bemoaning underhand practices that are cropping up in some markets.
He questions the relevance of some verticals offering BNPL services, and whether they are appropriate for consumers. “For example, large electronics might require longer dates, while fashion is shorter.”
Consumer watchdogs in Australia and the UK spoke out last year against restaurants and supermarkets offering BNPL solutions for perishables and essential goods.
Moline takes a stand against this, saying: “We don’t want to do instalments on food.”
He is also critical of exclusive deals between merchants and BNPL providers. “It’s a terrible strategy for a merchant. They might work for the BNPL to get traction, but it’s not a great strategy for merchants. Instead, they should offer choice.”
He adds: “We’ve seen that, particularly in Australia, many merchants have multiple choices now, and many wish they had never done an exclusive in the first place. I think that’s another big message, and we won’t ask people to be exclusive on acceptance.”
Finally, Moline hopes merchants will hold their BNPL partners accountable to their promises. “Hold them accountable for true demand generation, and how they can help you target customers and activate new consumer groups. By actively working with them, you can be successful through knowing that information.”
Photos: Albert Chua/The Edge Singapore
