Zilla, the Buy-Now-Pay-Later company founded in 2021, has suspended its BNPL services and is now focusing on a cross-border payments product, Zillawire, after struggling to convince customers to use the service, two people knowing the matter was reported to TechCabal.
“One of our biggest challenges has been that a lot of people don’t understand how credit works and think it’s about owing people,” an employee who asked to remain anonymous told TechCabal. “Most customers prefer to wait until they have the full amount to pay rather than get one now and pay in installments,” the person added.
The company confirmed its decision to suspend its BNPL offered to TechCabal and said he “had a few things to figure out.” The company affirmed that “the resumption of service is in preparation” without sharing a precise timetable.
Zilla was launched in 2021 by Tolu Abiodun and has approximately 100 merchants who offer various products and services that customers can pay for in two to four installments.
Despite slow adoption, two categories that have performed quite well are electronics and beauty products sold in high-end stores, as they are generally too expensive for the average consumer to pay for all at once , said a person close to the company.
But even these top-performing categories had a problem: Customers wanted more than the maximum four months Zilla allowed to finalize payments.
“The economy is tough and people need more time,” said Joshua, who runs a Zilla-registered gadget store. “Customers who want to buy now and pay later for phones or laptops prefer to use other services like CDCare because they give you the option to pay for up to a year.”
Victoria, a seller of wigs and other beauty products, has seen about five customers use Zilla in the two years since she joined the BNPL service. Two of these five customers ultimately asked Zilla for a payment extension because they found it difficult to make payments after four months.
Switch to cross-border payments?
Zilla’s new product, Zillawire, processes foreign transactions with suppliers on behalf of merchants. According to information on their website, merchants are required to upload their invoices and vendor account information for this service.
Regarding the reason for creating a cross-border payments product, the employee said the company noticed that many of its merchants were having issues with their international payments for their products and wanted to do something about it. According to her, Zillawire, launched in August 2023, performed better than expected and so the company is now focusing on that.