How to Make a Buy Now Pay Later App like Tabby (BNPL)

The era of Coronavirus brought many challenges but also accelerated the shift towards cashless transactions and digital payment solutions. 

As social distancing became the norm, consumer demand for seamless, contactless payment methods surged. This shift has propelled the Fintech industry forward, driving innovations to meet evolving consumer needs and preferences.

One such rising trend is the evolution of Buy Now, Pay Later (BNPL) solutions. 

These innovative services allow consumers to indulge in luxury items without paying the full amount upfront. Instead, they can spread the cost over time with interest-free installments.

In this blog, we’ll delve into the details of BNPL solutions, exploring how the Tabby app stands out in this evolving landscape. Discover how Tabby works, how does tabby make money, and what makes it a compelling model for businesses looking to implement a similar strategy. 

We’ll also guide you through the essential features and considerations for developing an app like Tabby. 

So, let’s dive in!

Understanding BNPL Apps: Is It Right for Your Business? 

To understand the potential of BNPL solutions, it’s essential to first grasp what a Buy Now, Pay Later (BNPL) app is and how it operates. 

Essentially, a BNPL service allows users to make purchases without paying for the items upfront. Instead, consumers can spread the cost over time through interest-free installments or low-interest plans. This model offers flexibility and convenience, making it an attractive payment option for many shoppers.

But what makes BNPL apps like Tabby particularly compelling? How do they manage to blend seamless user experiences with profitable business models? 

To answer these questions, let’s dive into how Tabby works and explore the specifics of its operation.

How Does Tabby Work? 

Tabby is a Dubai-based buy-now-pay-later (BNPL) service that enhances the shopping experience by allowing users to spread the cost of their purchases over time. 

Unlike traditional payment methods, Tabby lets consumers buy products from a wide range of popular retailers, including H&M, AliExpress, and IKEA, without paying the full amount upfront.

Here’s how Tabby works:

1. Seamless Integration: Tabby integrates with major e-commerce platforms, offering users the convenience of shopping from their favorite brands all in one place. This means you can browse and add items to your cart from multiple retailers through the Tabby app.
2. Flexible Payment Options: Whether shopping online or in-store, Tabby provides flexible payment plans. Online, users can choose to pay in four interest-free installments or settle their balance within 14 days. For in-store purchases, users simply scan a Tabby QR code at checkout, sign in or create an account, and link their debit or credit card. Tabby then processes an upfront payment of 25% of the total purchase and manages the remaining balance through installment reminders.
3. Instant Approval: Once a BNPL plan is selected, Tabby app pays the merchant the full cost of the purchase immediately. This ensures that the retailer receives their payment upfront while the consumer enjoys the convenience of paying over time.
4. Wide Range of Products: Tabby supports a diverse array of product categories, from home decor to electronics, clothing, and appliances. This broad selection allows users to find and finance a wide range of items through a single app.

Now that we know how Tabby works, let’s have a look at how industries are capitalizing on these BNPL solutions, reshaping the ecommerce landscape.

Industries Witnessing a Demand for BNPL Apps Like Tabby

As the demand for flexible payment solutions grows, various industries are recognizing the benefits of integrating Buy Now, Pay Later (BNPL) services like Tabby. 

These industries are witnessing increased consumer engagement, higher sales, and improved customer loyalty by offering more accessible payment options. Here’s a look at the sectors where BNPL is making a significant impact:

• Fashion and Apparel

The fashion industry is one of the earliest adopters of BNPL services like the Tabby app. Brands like H&M and Zara understand that consumers are more likely to make higher-value purchases when they have the option to divide the cost over time. BNPL options have proven particularly popular with GenZ and beyond who seek trendy, high-quality clothing but may not have the means to pay upfront.

• Electronics and Gadgets 

Electronics often come with a hefty price tag, making BNPL an attractive option for consumers looking to purchase the latest smartphones, laptops, or home appliances. Retailers like AliExpress and IKEA have capitalized on this trend by offering BNPL options, enabling customers to acquire high-tech products without the financial burden of a single large payment.

• Home Decor and Furniture

The home decor and furniture industry has also seen a surge in BNPL adoption. High-ticket items like sofas, dining tables, and decor pieces can be more accessible to a broader audience when customers can pay in installments. This encourages people to upgrade their living spaces more frequently and invest in higher-quality items.

• Beauty and Personal Care

The beauty industry has embraced BNPL solutions like the Tabby app to cater to consumers who wish to indulge in premium skincare, cosmetics, and personal care products. By offering installment plans, beauty brands can encourage more significant purchases, driving both sales and customer satisfaction.

• Travel and Hospitality

In the travel and hospitality industry, BNPL solutions have opened up new possibilities for consumers to explore the world. With the flexibility of spreading payments over time, more people can now afford to book their dream vacations, luxury trips, or simply cross destinations off their bucket lists. 

This increased accessibility has led to a rise in demand for travel experiences, allowing users to invest in memorable journeys that might have previously been out of reach. 

By offering BNPL options, businesses in this sector can attract a broader audience eager to invest in more experiences than they could before.

• Healthcare and Wellness

The healthcare sector is increasingly seeing the value of BNPL solutions like the Tabby app, particularly because not everyone has the financial means to afford comprehensive health insurance. Even for those who can, insurance often covers only specific treatments or procedures, leaving out many general healthcare needs. 

BNPL services can bridge this gap by offering flexible payment options, allowing patients to access essential medical care without the burden of upfront costs. This makes healthcare more accessible and can improve overall patient outcomes by enabling timely treatments.

• Education and Online Learning

With the rise of online learning platforms, the education industry is another sector where BNPL is seeing increased adoption. Students and professionals looking to upskill can now finance their courses and certifications over time, making education more accessible and budget-friendly.

Understanding the industries where BNPL services like the Tabby app are thriving will enable you to identify opportunities to integrate these solutions into your business strategy, driving growth and enhancing customer experience.

Key Features of a Buy Now Pay Later App Like Tabby

For a successful Buy Now, Pay Later (BNPL) app, it’s essential to include features that enhance the user experience and streamline operations for merchants. Below are the key features that can set your BNPL app apart from the competition and attract users to your platform:

• Login & Verification

Security is paramount in any financial service. A seamless login process with multi-factor authentication ensures that your users’ accounts are secure while providing easy access. Implementing biometric options like fingerprint or facial recognition can further enhance security and user convenience.

• Product Categories

Organizing products into well-defined categories allows users to navigate the app effortlessly, making it easier for them to find what they’re looking for. A clear categorization system not only enhances the user experience but also increases the likelihood of purchases, boosting your BNPL app’s success.

• Account Management

Give your users complete control over their accounts, with easy access to their payment history, saved cards, and personal information. A robust account management feature allows users to update their details, track spending, and manage their BNPL plans in one place, making your app like Tabby more attractive to potential users.

• Split Payments

The core feature of any BNPL app is the ability to split payments into manageable installments. Allow users to customize their payment plans—whether they prefer bi-weekly, monthly, or custom intervals—while ensuring the process remains interest-free and transparent. This feature is crucial in helping your app compete with established names like Tabby.

The Tabby app also allows users to pay ahead of the scheduled time, if they have the means. It enables them to take control of their finances and make payments as and when they can afford. With advanced payments, they can pay off their balance faster and avoid late fees.

• Reminder Notifications

To help users stay on top of their payments, integrate reminder notifications. These alerts can be sent via SMS, email, or push notifications, reminding users of upcoming due dates. This helps prevent missed payments and fosters a positive user experience, which is essential for the long-term success of a BNPL app like Tabby.

• Automated Deductions

Simplify the payment process by enabling automated deductions. Once a user links their debit or credit card, the app can automatically deduct the scheduled installment, ensuring timely payments without requiring manual intervention. This reduces the risk of missed payments and aligns with how Tabby makes money through reliable, on-time payments.

• Cashback

Incentives and rewards like cashback or coupons encourage more frequent use of your BNPL app. Users can earn cashback on their purchases, which can be credited to their accounts for future use. This feature not only promotes loyalty but also differentiates your app in a competitive market, potentially increasing how your Tabby-like app makes money.

• Merchant Analysis

For businesses, having access to detailed analytics is crucial. Cater to your retail audience by providing merchants with insights into consumer behavior, payment trends, and product performance. This data can help merchants optimize their strategies, and understanding these analytics is key to knowing how Tabby merchant fees contribute to your app’s overall revenue model.

• In-App Customer Support

You never know what issues may arise when using BNLP services like Tabby app. So, integrate in-app customer support options, enabling users to seek solutions to their questions or concerns when needed.

BNPL Market Trends: Why Now is the Time to Invest

The rising popularity of Buy Now, Pay Later (BNPL) apps like Tabby has caught the attention of both consumers and merchants, providing significant benefits to both parties. 

For users, these solutions offer a seamless and convenient shopping experience, allowing them to purchase what they need or desire without immediate financial strain. 

On the other hand, businesses and retailers gain increased revenue and customer loyalty, making BNPL an appealing option in the competitive marketplace.

Perks for your users:

• Convenience is Priceless: BNPL apps provide a hassle-free shopping experience by allowing users to pay in installments without the need for a credit check.
• Interest-Free Purchasing: Most BNPL services like the Tabby app offer interest-free or low-fee payment options. It enables users to enjoy the benefit of spreading payments over time without incurring interest charges, making it easier to budget for larger purchases.
• Transparency: Unlike most credit card purchases, BNPL services like Tabby ensure transparency by clearly outlining payment schedules and terms, eliminating the risk of hidden fees or surprise charges.

Perks for retailers:

• Increased Revenue: By offering BNPL options, businesses can attract customers who might otherwise hesitate to make larger purchases, thereby boosting sales.
• Increased Customer Loyalty: Providing flexible payment options helps build trust and encourages repeat business, fostering long-term customer relationships.
• Competitive Advantage: Implementing BNPL options can set a business apart from competitors, particularly in industries where consumers are increasingly seeking alternative payment methods.
• Higher Conversion Rates: By reducing the perceived financial barrier at checkout, BNPL apps can significantly improve conversion rates, turning more visitors into paying customers.

How to Monetize BNPL Apps Like Tabby

With such perks and benefits for the B2C and B2B markets, one might wonder how a BNPL service provider like Tabby sustains its operations while offering interest-free payment options. The question is, how does Tabby make money? 

Let’s delve into Tabby’s monetization strategy and explore additional avenues to generate a return on investment (ROI) for your BNPL solution.

Tabby leverages several revenue streams to maintain profitability:

• Affiliate Marketing: By partnering with various retailers, Tabby earns a commission for directing traffic and sales to their platforms. This mutually beneficial arrangement drives revenue for both the merchants and Tabby.
• Late Fees or Interest on Unpaid Installments: While Tabby primarily offers interest-free installment plans, the service may impose late fees if users miss their payment deadlines. It incentives users to pay their dues on time and creates an additional source of income.
• Merchant Fees: Merchants may pay a fee to have their products showcased as featured items within the Tabby app. This boosts their visibility and sales, creating another revenue stream for Tabby.
• Premium Features or Subscriptions: Offering exclusive features or subscription models can attract users willing to pay for enhanced services, such as personalized shopping experiences or early access to sales.

By integrating these monetization strategies, you can make an app like Tabby and ensure financial sustainability while continuing to deliver value to both consumers and merchants.

Cost of Developing a BNPL App Like Tabby

The cost of app development can vary significantly based on several factors, including the app’s complexity, the development team’s expertise, the platforms you want to target (iOS, Android, or both), and the region where the development takes place.

Here are some of the primary factors influencing the cost:

1. Platform Choice: Developing for multiple platforms will require more time and resources. If you choose to create a native app for both iOS and Android, the cost will be higher than for a single platform or a cross-platform solution.
2. Feature Set: The number and complexity of features, such as user authentication, payment processing, automated deductions, and merchant analysis, will directly impact development costs. Custom features like cashback rewards or integration with multiple payment gateways can further increase expenses.
3. UI/UX Design: A well-designed user interface and user experience are crucial for the app’s success. Investing in an intuitive, aesthetically pleasing design can drive up costs but is essential for engaging users.
4. Security and Compliance: Shop-now-pay-later services handle sensitive financial data, so robust security measures and compliance with financial regulations are vital for successful operations. This includes data encryption, secure payment gateways, and adhering to Payment Card Industry Data Security standards (PCI-DSS), all of which add to the development costs.
5. Backend Development: A scalable and secure backend is essential for managing transactions, storing user data, and integrating with merchants. The complexity of backend development, including server infrastructure and database management, will influence the overall cost.
6. Testing and Quality Assurance: Rigorous testing is necessary to ensure the app functions smoothly across all devices and operating systems. This includes functional testing, performance testing, and security testing, which can add to the development timeline and cost.
7. Ongoing Maintenance and Updates: After the initial launch, you will need regular updates and maintenance to keep the app running smoothly, introduce new features, and fix any bugs. This is an ongoing cost to factor into your budget.

Consider these factors and your business goals to estimate the budget required to make an app like Tabby. Our expert consultants, at Techigator AE, are available to offer their insights to guide your decision, ensuring an ideal balance between the cost, quality, and functionality of your app to ensure it stands out in the competitive FinTech landscape.

Partner with Techigator AE: Transform Your Business Strategy with a BNPL App

Now that you have a clear understanding of how to make an app like Tabby and how BNPL services are revolutionizing the online shopping experience, it’s time to bring your app idea to life.

Techigator AE is a premier mobile app development company in Dubai, UAE catering to enterprises and startups of diverse industries. With a proficient in-house team of developers, designers, and quality analysts, we ensure robust, secure, and scalable applications that drive results.

Connect with our support team and we’ll take your BNPL app idea from a vision to digital reality!