Redefining the Buy Now, Pay Later industry: Interview with the COO at Zilch

X4 Technology’s Jemima Mann speaks to Rakesh Harji, COO at Zilch and an award-winning software technology entrepreneur with over 28 years of experience, on Zilch’s success in the past 12 months.

Zilch is a London-based Fintech company with a product that allows customers to shop wherever MasterCard is accepted and spread their payment over 6 weeks for zero interest and zero fees.

What has been your biggest learning curve over the last 12 months?

Looking back at the past 12 months, I think wow, that was a moment no one has ever really experienced before. COVID-19 has been a real test for our business and I’m so proud of the results we’ve delivered. There are a few points that have helped us to achieve this success.

The first thing is that we managed to maintain culture. Culture is vital to our business. What we’ve created to how we do things and behave is geared and centred around culture. Culture is behind our exponential growth as a business. In October 2020 there were only 15 of us, now we’re up to 126 and we’ve managed to do all of this in the middle of a pandemic. Working closely with our CEO, Philip Belamant, we personally onboard every single member into the team by taking them through our Playbook. Our Playbook highlights the essence of the business, the culture, the ethics, and attitude we express at Zilch.

Working remotely has been a learning process for us in terms of how to maintain transparency and disseminate information across our team. Our process has been to do so quickly and laterally by being transparent about everything we do.

It’s important to celebrate and acknowledge every single win. All these small things, whether internal or external are celebrated before quickly getting back to the mission in hand.

Since the pandemic, there has been an accelerated adoption of digital payments and a significant change in consumer behaviour. How has the pandemic and change in consumer behaviour impacted Zilch? 

Our users are incredibly savvy when it comes to cash flow and are always looking for alternative options that are better and more meaningful than traditional lending options. To accommodate this, we have designed, and geared built our product around the customer and because of this, word is getting out across our users.

We surveyed our customers about their values, using social media, and phone calls to see how things are going. When you talk to Gen Z and Millennial users, three clear values come out; they want to be responsible in the way that they do things, they’re trying to ensure things are affordable, and lastly, they want to make sure that the partner they use has their back. From a Zilch perspective, I believe we are fundamentally aligned across all three.

We are a responsible brand who never want to over in debt our customers. We’ve built the company from day one to be a customer-first brand and that has helped us grow exponentially. Our advanced affordability checks combined with open banking technology are in place to ensure we never lend more than a customer can afford and our streamlined payments system and access to everywhere that MasterCard is accepted means that there is no need to juggle multiple payment timelines. In essence, we are a cash flow manager, and this is clearly working for our customers – today we have over half a million users and, this quarter alone we’re forecasting over 120,000 users to join Zilch.

In terms of change, before the pandemic, our users spent across various lifestyle categories like fast fashion and travel. During Covid-19, spend continues to accelerate at the same pace but it’s clear our users have readjusted this towards categories aligned to supporting a work from home lifestyle. For example, shopping at DIY brands like B&Q instead of BOOHOO.

Zilch is now the only FCA regulated BNPL Provider in the UK – what does that mean for your company and the wider BNPL industry?

When we evaluated the market we wanted to be a direct-to-consumer brand. To do this we needed to ensure we had a high degree of trust with our customers. Therefore when we set up Zilch, we decided we needed to approach the FCA directly as we knew we needed to be a regulated product, and therefore a regulated company.

We kicked that all off in 2018 and spent 12 months working with the FCA to attain a full Consumer Credit License – making us one of the first in the industry to do so. We did this from day one because it was, and still is, the right thing to do.

More than 6 billion people are expected to use digital payments by 2023. What do you see being the industry’s biggest future trends and will they change the types of skills needed? 

I believe there are four pillars. The first pillar is all geared around responsibility, every product must be responsible moving forward. When it comes to things like buy now, pay later, responsibility becomes even more important. The steps we’ve taken from day one to be FCA regulated showcase exactly how serious we are when it comes to responsibility – and I believe our users see that.

The next pillar is affordability. With lending, we make sure that with every buy now, pay later transaction affordability is being applied. We know for a fact that our users can pay that money back without ever being financially indebted or suffering from stress.

Because Millennials and Gen Z don’t have a deep credit history, we looked at how we could address this problem using new world solutions. As a new company, we were able to to take advantage of leading-edge technology that helps solve such problems. We introduced open banking to help assess user affordability to ensure our users can pay back what we offer them.

The final two pillars are convenience and choice. Our users want a simple user experience that allows them to check out quickly. We want to ensure we provide as much choice and convenience when it comes to how they want to pay for their purchases.

All four of these pillars are at the heart of what we do at Zilch. A proud moment for me was when we launched the app on the App Store, and within 48 hours we were number two, just behind PayPal. Our app gives our users the ability to shop online and instore anywhere without restriction. By launching Tap & Pay-over-time, the high street is going to be a huge space for us once COVID-19 restrictions are removed. We’re the first company in Europe to offer a way to Tap and Pay anywhere – and we’re really excited about it.

With the number of new competitors rapidly growing and big tech companies such as Apple Pay and Amazon Pay being created, what are the biggest challenges you face when competing for top talent? 

In terms of skills, having our headquarters in London is extremely fortunate.  There are so many technology companies with talented individuals meaning there is more than enough talent to go around. To attract people to work with you, you must do things right as a brand. The people who have joined us have done so because they have seen what we do and want to be part of that.

Attitudes have changed quite dramatically over the years in terms of what companies stand for. Before, people simply wanted to be involved in cool tech whereas now future employees look at what the tech is doing for users. People that come into our business evaluate our ethics, they evaluate what we stand for, they evaluate our mission and it’s these qualities that ultimately influence people deciding to come and join the team. This has played an important role during the pandemic as we accelerated hiring.

We see the world differently at Zilch. So while we are often grouped in with other Buy Now Pay Laters (Like Klarna and Affirm), Zilch’s vision is much broader. Our infrastructure is unique and designed to be much bigger than just a pay-later platform. Instead of forming an allegiance with retailers, we go to the customer first and because of this model, will be able to offer more from our platform, while that’s pay now, getting back rewards, or even paying in crypto! In tune with that, the talent we attract can be excited about being part of a bigger picture.

Could you summarise the culture at Zilch? 

Do something.

Don’t take too long to think about something. Do something and once you get going, iterate again and again and again.

We accept that everybody makes mistakes. Just be honest and own up to your mistakes. Then we can work through that to make things right. We’re tough, but fair. People prefer direct feedback and transparency rather than taking too long to explain what’s not working.

would you describe your time in the industry? 

The word would be wow. What I mean by that is in September 2018 when I joined Zilch, we were three people who had nothing; no brand, no product, nothing except an idea. Today, we’ve built a business that’s worth over five hundred million dollars and climbing.

This industry is evolving so fast and there’s so much potential to use this tech and gear it to change people’s lives for the better. It’s been a wonderful learning experience and having the opportunity to work with the people we have in our business has been amazing.

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