Singapore-based buy now, pay later (BNPL) start-up, Pace, is expanding its payments services, including a new virtual card in Singapore after acquiring local BNPL rival Rely last month.
Pace Enterprise bought fellow Singaporean BNPL player Rely at the end of March for an undisclosed sum – a deal that gives Pace customers greater access to different payment plans in Singapore and Malaysia.
The acquisition follows a US$40 million (S$54.6 million) series A fundraising round by Pace in late 2021. With Pace operations already in Singapore, Malaysia, Hong Kong, and Thailand, the Series A funds are financing its pan-Asia expansion in Japan, South Korea and Taiwan.
The fast-growing online payment platform now has 5,000 points-of-sale across the region and hopes to have one million users by the end of the year.
In its latest product release, Pace launched the all-digital card directly linked to the Pace app in Singapore. It is expected to be rolled out to other markets in Asia in coming months. The Pace Card can be used for online purchases, with in-store links to come, and allows shoppers to split their purchases into three interest-free payments.
Pace’s acquisition of Rely is the latest in a wave of consolidation and partnerships aimed at accelerating BNPL growth and tapping new Asia-Pacific markets. Singapore shopping and rewards platform ShopBack bought BNPL platform hoolah late last year, and regional BNPL provider Zip Co moved into Singapore in February in an exclusive partnership with Singtel’s Dash app.
BNPL payments are expected to grow rapidly in coming years, with analytics firm Research and Markets forecasting Singapore’s BNPL market will reach US$3 billion (S$4.1 billion) by 2028, more than six times its current value.
A parliamentary reply in April on behalf of the Minister in charge of the Monetary Authority of Singapore (MAS), Tharman Shanmugaratnam, said Singapore’s 2021 BNPL transactions totalled just S$440 million (US$322.5 million). That accounts for less than 0.5 per cent of the S$103 billion (US$75.5 billion) in credit and debit card payments in Singapore last year.
Authorities believe BNPL schemes do not pose significant consumer debt risks in Singapore due to current safeguards which include suspending users from making further BNPL purchases once a payment is overdue, and no compounding interest on an outstanding amount.
Nevertheless, MAS said it is closely monitoring the sector, including the experience of other countries where BNPL schemes have taken off more strongly, and a BNPL working group has been formed under the guidance of the Singapore FinTech Association (SFA) and MAS.
The industry-led group will develop a BNPL framework and code of conduct for all BNPL providers in Singapore to ensure consumers remain well protected as the sector expands.