Browse Now, Pay Later

Nov 27, 2021

If you've read some of my posts before, you know I'm obsessed with product distribution, and by association, web browsers (e.g).

Microsoft Edge has announced a native "buy now, pay later" (BNPL) feature that will automatically appear for users at checkout (or anywhere you'd enter a saved credit card number). After initial resistance, they've doubled down on the commitment.

Microsoft partners with 3rd party Zip (previously Quadpay) to offer a BNPL payment option at browser level. It means any purchase between $35 - $1,000 you make through Microsoft Edge can be split into 4 installments over 6 weeks. (Source)

How does it actually work? You enter your credit card information into Edge, which offers to save it for future use. Next time at checkout, you can used either the saved card, or a virtual one-time use card from Zip that will "buy now, pay later" your card. Edge/Zip take a $4 fee (unclear what Microsoft's take rate from Zip is).

Why is this interesting? A short primer on BNPL first. BNPL has existed for a long time but recently found foothold in all types of digital payments. Customers often prefer BNPL over credit, that's why merchants often pay 2-8% to offer their customers the option. BNPL doesn't go over the traditional payment rails of Visa or Mastercard – which means lots of interesting things: bypassing fees, more data transparency, to name a few.

Microsoft hasn't blatantly used the browser like this since the 90s with Internet Explorer and the cascading toolbars that littered the UI. Contrast that with Google, who has been careful not to overstep the boundaries between the end user and the website. Although, I'm sure that we would be just as annoyed with Chrome if it aggressively defaulted to a much worse search engine, like Bing.

Will browsers become distribution machines again? Browsers sit between us and our websites. But that means they can pretty much do anything they please: insert new payment options, block (or insert) ads, hide (or share) our digital footprint, or and everything in between.

Microsoft's play for BNPL is a bad look. Maybe it is consumer-friendly for some, but it for others, it can be predatory (allowing people to buy what they can't afford). It feels wrong to have a browser remind us that it sits between us and our payment. But for every feature like BNPL, there's others that can create consumer surplus by changing our browsing experience just in time. And now that everything is based on Chromium, things could change very quickly.