“There is a growing need in the financial sector to digitalise processes in order to offer an experience similar to Amazon’s”
Octavio Soler Bach is the founder and CEO of Instant Credit, a Spanish startup which offers consumer loans in physical as well as digital sales points (e-commerce).
The company was created in 2016 in Barcelona, and it acts as an intermediary through a multi-financial and multi-channel technology platform which offers credit in a transparent, secure, instant and paperless manner.
In June, InnoCells acquired the platform and incorporated it as part of Banco Sabadell Group's value proposal in payment methods and consumer financing. The entity offers competitive payment solutions to more than 19,000 retailers who are online customers.
Instant Credit was created as the first multi-financial solution in the Spanish market. What was the thought process behind this innovative solution?
In 2015 traditional consumer financing processes were not perfectly adapted to the requirements of online consumers. The idea came about after noticing online retailers needed to be able to offer a deferred payment method to consumers, which is beneficial for the retailer as well as the consumer.
What are the limitations of deferred payment solutions?
They all followed a “uni-financial” model, where the online retailer is restricted to a single institution to obtain credit. This is a huge limitation, even more so when considering that each financial institution specialises in granting specific amounts, different customer profiles, sectors etc.
What makes Instant Credit different to other online financing platforms?
Our multi-financing model is unique in the market. We have integrated multiple financial institutions into our platform, which allows us to offer retailers and consumers better conditions and wider coverage, as well as a higher credit approval compared to other players.
Our request, confirmation and credit signing process is 100% digital, adapted for online purchases as well as physical store and telephone points- instant and definitive, as the retailer receives real time confirmation of the sale and payment of the purchase.
Are there any other aspects which make Instant Credit stand out?
We are the first supplier which is developing an offer with a wide multi-country geographical coverage, as we have included banks and financial institutions which operate in different European countries into our platform. This way, retailers can cover different countries in which they are present, through a single technological integration with Instant Credit.
How have you managed to increase retailers sales?
Offering financing at a sales point is an excellent marketing tool to increase retail sales, particularly in those sectors which have a high average-ticket, such as the travel, electronic or household product sectors.
The increase could be due to obtaining new sales, whether from current or new customers, these sales would not have been obtained if a flexible payment method, such as financing, had not been offered. Furthermore, by reducing the consumer’s price sensitivity, the retailer increases their average sales ticket. Lastly, interest free campaigns also stand out as sales drivers, as they are attractive to consumers.
What are the steps to obtain instant financing?
The credit request and granting process is very simple. From the point of sale itself (online or physical) the consumer chooses the option to pay for their purchase in comfortable monthly instalments.
They are informed of the terms and conditions from the very beginning, in a completely transparent manner. They choose the number of instalments in which they wish to pay for the purchase, they fill their personal details and request the credit. Lastly, they enter their card details and sign the credit contract. At that point, they confirm the purchase with the retailer, and they are granted the financing amount in real time.
How long does it take?
The entire process takes between 45 seconds-1minute. The monthly instalments are automatically deducted, and the customer is ready to enjoy their purchase. Easy, isn't it?
Can you describe the Instant Credit team?
We are lucky to have a very well experienced team, a team which is also very driven and eager to work together to develop the first leading digital financing platform in Europe.
Our team combines strong and solid experience in the financial, technology, e-commerce and payment solutions sectors. Myself, as the founder of Instant Credit, I have more than 12 years experience in Fintech, particularly in digital financing and online payment methods, and I have managed diverse projects in these sectors on a national and international scale. Other members of our team have worked in international payment institutions, in e-commerce divisions of banks, or in payments, risk and fraud departments in large e-commerce institutions.
Are there any growth developments on the horizon?
In 2019 we are expecting a large increase in volumes financed through our platform, in Spain as well as abroad. Furthermore, we are developing a series of digital acceleration projects together with Banco Sabadell Group and we are expecting to significantly grow our presence in Europe.
Our team is currently growing in order to accommodate expected growth, above all, in the technology department. Our objective is to develop product improvements to offer users who require financing the best experience and usability, maintaining the “instantaneous” nature of the process.
How is the consumer financing sector in Europe developing?
It is changing a lot, but it is going to change even more. Currently, the majority of banks and financial institutions have traditional credit request and granting proposals which are not adapted to the consumer. There is an increasing need in the sector to digitalise and automate the processes to offer buyers instantaneity and an experience similar to Amazon’s.
And in terms of online financing?
There is a lack of multi-country players. Current solutions are local, they do not offer solutions large retailers demand for unique solutions with wide international coverage. The challenge is to create a truly European solution, which is what we are working on.
How is the digitalisation of financial services developing?
It will follow the development of new banks, financial institutions and payment entities which have been created online, and pressure traditional banking into changing and digitalising itself. Without counting on the increasing development of financial services on behalf of large players which were created in other sectors, such as Amazon, Apple or Google.
In the short term, the international standard of many processes, such as registering new customers or requesting and contracting financing options, shall be to drive 100% digital and instant operations for users in all channels.
What is the entrepreneurial environment like in Spain?
It is a relatively dynamic environment, with a constant flow of new technology based companies. However, we are still a long way away from having the same entrepreneurial facilities as in other countries.
In particular, access to financing for innovative projects needs to be improved, through increased support from the public sector to entrepreneurship, as well as the development of investment networks, not just local ones, which allow entrepreneurs to have greater and easier access to capital abroad. Furthermore, the current tax regime in Spain for new businesses could also be improved, given that minimum tax advantages are offered.
InnoCells acquired the platform in June: What does integration into Banco Sabadell Group represent for Instant Credit?
The incorporation of Instant Credit into Banco Sabadell Group consolidates our business model and opens up a lot of opportunities. Furthermore, it includes important synergies in the acceleration of the digitalisation and instantaneous processes in different areas of the entity, where Instant Credit can make significant contributions.
Furthermore, we are in the process of incorporating our deferred payment method into the bank’s wide retailer network, to offer them a 100% digital and instant service, perfectly adapted to buyers and retailers.