- CredPal, a Nigerian fintech startup, has launched a ride now, pay later offering for users in partnership with Bolt.
- Users can opt into the service by signing up on the CredPal app and activating an option to pay for their Bolt rides at the end of the month.
- Through this service, CredPal could boost usage of its app as a payment option, while Bolt could attract increased patronage of its service.
One of the more popular developments in the Nigerian startup space has been the proliferation of buy now, pay later (BNPL) startups in the past three years. Most of these startups enable users to purchase products and services that they would otherwise have to save for months to buy. Little wonder, it appears to have become an instant hit with Nigerians.
According to the National Bureau of Statistics, seven in ten Nigerians lack access to credit. As a result, making purchases in Nigeria often means paying at once and out-of-pocket. As the credit culture has slowly caught on in Nigeria, startups in the space have offered BNPL services for many things ranging from electronics to home appliances.
In a recent development, users of CredPal, a Nigerian fintech startup, can now access ride now, pay later services following the launch of its new product, Ride-On. Developed in partnership with ride-hailing giant, Bolt, CredPal users in Nigeria can now take Bolt rides and pay at their convenience.
Currently, the service is only accessible after users have signed up on CredPal, as the startup is responsible for underwriting the cost of their trips. However, unlike regular BNPL offerings, users do not have to pay a portion of their fare during the ride. Instead, they can choose CredPal as a payment option while they repay the cost of the ride at the end of the month. Like its regular BNPL offer, users are pre-qualified based on specific parameters, while Ride-On has been structured so that repayments coincide with the user’s salary date.
Fehintolu Olaogun, CEO and Co-Founder of CredPal, in a statement shared with Techpoint Africa, highlighted that Ride-On provides users with a better way to manage their finances.
"I believe transportation is one of the daily essentials that a working Nigerian considers when planning a monthly budget, so what we've done with CredPal Ride-On is offer a choice of using credit that has been availed to them to better manage their monthly expenses."
Necessary innovation or nice to have?
In one of his more popular quotes, Steve Jobs quipped, "People don't know what they want until you show it to them. That's why I never rely on market research. Our task is to read things that are not yet on the page."
Given his outsized influence on many startup product leaders, it is no surprise that numerous startups have built products they were convinced people needed. But for Olaogun, Ride-On is more than just a product that the team was keen to make but one that many customers clamoured for.
Kwaku Ampadu-Manu, Bolt's Country Sales Manager, sees Ride-On as a necessary product that could help accelerate the adoption of digital payments while providing Bolt riders with an alternative payment option.
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"This partnership gives riders access to a much-needed alternative that meets their mobility needs without immediately spending out of pocket, and we are happy to work with CredPal to foster our mission of making our cities for people and not cars."
While CredPal is almost certainly the first Nigerian startup to launch a ride now, pay later offer, this won't be the first time a startup provides this service to its customers. In 2016, Indian ride aggregator, Ola, launched a credit service that gave customers up to seven days of credit where they could book rides without paying upfront. Similarly, Zip, a BNPL service, was added as a payment option for users of Australian ride-sharing startup, GoCatch.
In Ola's case, it first tested the service with 10% of its 150 million customers before opening it up to everyone. In doing so, it increased its billing cycle to 30 days allowing users to pay for their rides monthly.
While it is still early days, how well a ride now, pay later service works in Nigeria remains to be seen. On the flip side, this gives CredPal a way to grow its user base in the country. Since users have to sign up through the CredPal app, the startup has all it needs to promote its growing suite of products. Just like Ola launched its ride now, pay later option with an eye on increasing usage of its payment service, Ola Pay, this could enable CredPal to increase the use of its service.