The Buy Now Pay Later (BNPL) service is becoming a financial solution that more and more online and offline customers are interested in. Introduced in Romania by the fintech Revo Technologies, Mokka service provides Romanian retailers an instant solution to customers’ purchases, without filling in documents and available on all sales channels.
BR talked with Irene Shvakman, co-founder of Mokka service, about the company’s steps in the industry, its presence in Romania and its unique traits, as well as the shopping online in times of COVID-19 pandemic and how this BNPL financial solution can improve the shopping experience and why Generation Z and Millenials are globally in love with it.
By Romanita Oprea
What can you tell us about the Revo Technologies company’s history and what were the most important steps in its development?
Revo was founded in late 2012 with the goal of reinventing financing in stores. The founders, who had been working for years with leading financial services players in the field of consumer finance, believed that new mobile and big data technologies would create a big opportunity to deliver instant and paperless financing in stores to allow shoppers to Buy Now and Pay Later. The bet was that traditional banks would be slow to adapt to the new technological realities. In 2013, we launched our first partnerships with merchants, where we delivered an MVP solution for mobile devices that allowed any shopper to Buy Now and Pay Later in physical stores. This proved to be very popular with major merchants that could not offer financing in their stores until then. In 2015, we introduced the first solution for online stores, which allowed merchants to offer buy now pay later omnichannel. In 2015, we also attracted our first investment from a top global fintech venture fund, VEF, based in Scandinavia. In 2017, we raised our second round of capital from Baring Vostok Capital Partners, the leading tech fund in the CEE region and in 2018 the company reached profitability. In 2019, we began to plan our expansion in Central and Eastern Europe and in 2020, we introduced our Mokka Buy Now Pay Later brand and launched our first CEE market – Poland. We reached more than 10 million registered customers in 2021 and successfully launched operations in Romania.
Revo Technologies introduced Mokka service in Romania. What are the particular traits and the uniqueness of Mokka, comparing with other similar services?
Mokka’s service stands out in the Buy Now Pay Later space for its clarity and flexibility. With Mokka, customers can pay at online AND offline stores and always have the choice of the payment plan that suits them best – from 30 days to 24 months. So, shoppers can make both small and bigger purchases and tailor the payment plan to their budget. Moreover, Mokka customers always know how much is available for them to spend before they shop. Other BNPL services are only available at online stores, generally do not communicate how much the shopper can spend and do not offer flexible payment plans. Some BNPL services push customers into selecting a short-term payment plan and then make money from high penalty charges if customers don’t pay on time. These practices are taken from “typical banking playbooks”. We do not believe in such practices as they destroy trust with consumers. With Mokka, the customer can choose a payment plan that fits their budget and never incurs any penalty charges if paying on time. And soon, with the launch of our mobile app in CEE, planned in Q1 2022, our customers will be able to pay with Mokka at any store.
Do consumers spend more time shopping online at home during the COVID-19 pandemic? How many of them use BNPL?
Our online partners have seen even faster growth since the pandemic as consumers spent more time online. However, they also noticed that more traffic to online stores and mobile apps does not necessarily turn into more purchases. Our research since the pandemic has found that dropped baskets have increased substantially for many online merchants. Typical reasons for this are: 1) lack of certainty about size or quality of the items, 2) would like to look for better deals or prices, 3) lack of convenient payment and/or delivery methods and 4) insufficient funds available at the moment of shopping. BNPL solves a number of these issues for merchants and consumers.
With BNPL shoppers need to pay 30 days after receiving the order so they have time to return what they don’t like to the store and pay only for what they kept. BNPL is typically offered on very attractive terms and also solves the issue of funds availability. By offering BNPL, merchants give shoppers more reasons to buy in their stores. Other factors are particular to CEE – majority of online sales are still made with “pay on delivery”. This locks in a large amount of working capital for merchants who need to wait for the item to be picked up before they can collect payments. This process is costly, and many goods are shipped back.
Is it wrong to say that BNPL will be the future for online and offline shopping?
Buy Now Pay Later is growing globally and is increasingly recognized as a “must have” payment method for merchants, particularly focused on GenZ and Millennial customers. Several other e-commerce trends are fuelling this – growing demand for omnichannel experiences from consumers and the need for more flexible payment alternatives. Merchants who are focused on their customers’ experience increasingly recognize that Buy Now Pay Later helps them attract new younger customers, increase conversion, and drive higher repeat purchases.
Buy Now Pay Later is popular with GenZ and Millennials and Mokka works on improving shopping experience for these customers. Can you give us some examples in this regard?
The experience of using Mokka is very different from that of any traditional banking products. The customer can instantly register for the service at any partner store with only their passport and ID. We give a decision to customers within 30 seconds and if they are approved, they can pay for their purchases with Mokka immediately. We approve many more consumers than is typical for banks since we are great at working with those who are younger and may not have a credit history.
With Mokka, the customer always knows how much he needs to pay. There are no hidden fees and commissions or complicated minimum payments, which keep many consumers paying interest as long as possible. Mokka is available at stores at 0 percent so this beats credit cards. The customer’s advance amount with Mokka grows with time automatically, as they use our service. Our adaptive check-out is very simple, the customer selects one of the payment plans and confirms with an SMS code.
In addition, we are soon planning to launch our Mokka mobile app, which will add a number of exciting features, allowing consumers to pay with Mokka anywhere. We will be announcing these shortly.
What is the evolution of the Mokka service in Romania, compared to other countries?
We launched our business in Romania in early 2021 and have launched a number of important partnerships with top retailers, including Noriel, CCC, Mobexpert, Lensa, and others. In addition, we recently launched a partnership with Gomag, the top e-commerce platform, which will enable Gomag merchants to easily add Mokka to their check-outs. We are excited by the interest we are seeing from Romanian merchants and consumers. Our recent research shows that more than 50 percent of Romanian Gen Z and Millennials are interested in Buy Now Pay Later and plan to use it in the coming 12 months.
What is the company’s turnover in H1 2021?
The company will exceed USD 40 million in revenue for the year 2021.
What are the main objectives for the CEE and Romanian market?
We plan to continue to expand our business in Romania, building on our leadership position in this market and leveraging our strong local team. The plan is to invest into onboarding top Romanian and international merchants, operating across CEE, and partnering with leading companies in payments and e-commerce. We have a dynamic pipeline of new services that we plan to launch shortly and new merchant partners with whom we are integrating. Also, we want to be the leader in Buy Now Pay Later in Romania and across CEE. This means building brand awareness and trust among consumers and continuing to build our presence across new CEE markets.
Revo Technologies was founded by Irene Shvakman and Fernando Dias Da Silva. Prior to founding Revo, Irene was a Senior Partner at McKinsey & Company, where she led McKinsey’s work with major financial institutions in Central and Eastern Europe, Russia, and CIS countries. Irene is American, spent her early career in the US and then returned to CEE in the mid-nineties to join McKinsey. She was born in Ukraine and emigrated to the US as a teenager. Irene Shvakman holds an MBA from Harvard Business School and a BS in Biochemistry from Brown University in the US.
Prior to founding Revo, Fernando Dias Da Silva was a Board member and Chief Risk Officer at Renaissance Capital Bank, the leading consumer lender in Russia. Prior to working at Renaissance, Fernando worked at GE Capital and Citibank in Brazil, Latin America and Europe in senior risk management roles. Fernando is Brazilian. He holds an MSc degree in Finance from University of Birmingham in the UK and an MSc in Engineering from Mackenzie in Brazil.
Founded in 2012, Revo Technologies is a leading fintech company specialized in Buy Now, Pay Later in CEE (Poland, Romania) and Russia. Operating under the Mokka brand, the company delivers instant, paperless, and omni-channel payments for leading offline and online retailers.
Mokka is now available in more than 7,000 partner stores across its key markets in categories such as fashion, footwear, kids, jewellery, beauty, household goods, electronics, sports, and travel.
Revo Technologies is backed by top technology investors including VEF, Baring Vostok Capital Markets and Castel Capital. In Romania, Mokka is available in such stores as Noriel, CCC, Mobexpert, Ideall, Lensa and others.