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In this 3-part series, Socure’s buy now, pay later (BNPL) industry experts explore the biggest challenges faced by BNPL platforms and the pros and cons of different approaches to solving those challenges. First up, Socure’s Founder and CEO Johnny Ayers writes about what works and what doesn’t for BNPL providers trying to maximize growth by increasing acceptance rates for their hard-to-identify consumers.

Challenge 1: Unlocking Your Most Lucrative & High-Growth Customer Markets

BNPL’s Best Customers are the Toughest to Onboard

Gen Z and millennials represent a huge and very competitive growth market for BNPL providers. This is partly due to the rejection of mainstream banking by these key demographics. At times, they don’t trust traditional financial institutions. In other instances, they don’t have a long-established credit history. Or maybe, they’re new-to-country or simply new to banking. Whatever the rationale, BNPL providers’ most lucrative target consumers don’t have traceable credit histories—which is partly what makes BNPL options so attractive to the non-traditional banking customer.

What happens when traditional systems try to verify a BNPL providers’ non-traditional prospects? Legacy identity verification and fraud prevention vendors default to credit bureau data for identity validation and don’t look at all dimensions of a consumer’s identity to determine the risk. Said differently, the bureaus tend to cover only well-established consumers, not the credit-invisible or thin-file BNPL demographics.

Legacy identity verification providers simply don’t have the right tools to make accurate decisions about consumers who are outside of the traditional financial services market. Thus, using an identity verification and fraud prevention system that wasn’t built for BNPL platforms shuts you out of your highest growth customer market and ultimately hurts your business.

The Solution: Evolved Verification for Today’s Evolving Customers

As the only BNPL-specific identity verification and fraud prediction solution available, Socure offers the most optimal way to onboard your most promising but hardest-to-verify BNPL prospects. Reaching far deeper and wider than traditional fraud prediction and identity verification vendors, Socure’s solution incorporates all end-customer contact data, including shipping and billing information, purchase history, and device attributes and behavior, along with transaction and merchant detail. This industry-leading, holistic risk model is then trained on transaction-level performance feedback data from a slew of top-tier BNPL providers, enabling Socure to refine, enhance, and evolve its capabilities in near real-time.

The model also captures and evaluates velocity of the use of an identity or individual identity elements across the entire Socure network of 1,800+ customers to detect potentially risky behavior or repeated good identities. For example, a single phone number controlled by the fraudster used with different PII combinations repeatedly across the Socure network would be a strong indicator of fraud. If the BNPL provider only saw the phone number once, they wouldn’t be able to stop this. However, when looking across the entire Socure network, this type of fraudulent behavior is easily detected and prevented.

Knowing that BNPL platforms must strike a balance between increasing acceptance rates and managing risk, Socure’s BNPL solution is purpose-built to meet these unique market challenges with the highest level of classification accuracy in the industry. Going a step further, if a returning customer is making a purchase while using a brand new device and a shipping address halfway across the country, a legacy system would recommend declining the transaction. However, because Socure’s solution is able to link the device to that returning customer across our network and recognizes that the shipping address is their new address via updated utility records, Socure would recommend approving that transaction.

Many identity verification solutions only focus on new account risk or individual pieces of the identity (email, phone, address, device), but Socure’s BNPL solution is the only product in the market that looks at the entire lifecycle of the identity from origination through every subsequent transaction, while also looking at all dimensions of risk related to the identity and transaction: name, email, phone, address, date of birth, Social Security number, geolocation, device, velocity, behavioral, transaction information, merchant details, historical purchase behavior and network intelligence from the Socure-wide ID graph. This comprehensive 360-degree view of risk is what enables Socure’s BNPL providers to deliver the most accurate decision in the market by solving for both false positives and false negatives at the end of the tails that legacy providers simply cannot solve.

Socure has proven to help leading BNPL providers auto-accept up to 97%+ of new customer applications, whether from hard-to-identify or mainstream prospect populations. Socure also helps BNPL providers achieve fraud capture of up to 80% in the riskiest populations of users. Finally, the company significantly reduces manual reviews and bad declines on overall transactions, opening the doors to new revenue and increased automation for scale.

Want to learn more?

BNPL platforms blur the lines between traditional identity fraud and transaction fraud protection. Using an identity verification and fraud prediction system that only addresses one of those issues, or tries to combine them together ad hoc, will throttle your business growth. The complexity of the BNPL consumer requires a solution that is purpose-built to not just reduce fraud, but also to seamlessly onboard your highest-growth target customers for sustainable, scalable revenue.

Socure’s technical teams and data scientists have specific expertise in helping BNPLs evaluate their current systems, and can even architect data studies free-of-charge that identify areas for improving your decision systems and fraud capture rates. I’m confident that we can empirically prove and quantify the value that our BNPL-specific identity verification and fraud prevention solution will bring to your business. Contact us here to learn more—and stay tuned for the second post in this three-part series on BNPL industry challenges. In August, Socure’s VP of Product Marketing, Anthony Winslow, will examine how the BNPL industry can create a more friction-free customer experience.

Johnny Ayers
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Johnny Ayers

Johnny Ayers

Johnny Ayers is founder and CEO of Socure. Since founding the company in 2012, he has had a number of roles, including managing and leading strategy for the Direct Sales, Channel, Product, and Growth organizations. Johnny has been instrumental in building the company's tremendous customer base and suite of industry-leading digital identity verification and fraud prevention solutions. He is also a frequent expert speaker on fraud, authentication, and KYC/AML, and has been quoted in publications such as the WSJ, Forbes, Bloomberg, Thomson Reuters, Cheddar,, and more. In 2022 he was awarded Ernst & Young’s Entrepreneur of the Year, Finovate Executive of the Year, and has been named by Goldman Sachs as one of the top 100 Entrepreneurs of 2021 and 2022. Outside of Socure, Johnny is an investor in and an advisor to companies including; Acorns, Alloy, Astra, Bask, BillGo, Chipper Cash, Commerce Ventures, Curve, MoCaFi, and more.