The Market
BNPL & non-fintech players
As the concept of embedded finance gains traction in the online shopping landscape internationally, driven by consumer-focused, tech-savvy companies, it is projected that the market size that can go up to $76,46 billion by 2033, with digital spending using ePOS finance/Buy Now Pay Later (BNPL) over eCommerce channels that could soar up to $680 billion by 2025. More specifically, with the introduction of flexible payment solutions, retailers are able to change the way consumers approach online purchases, offering them an array of options that match their ever evolving needs.
More specifically, the European Buy Now, Pay Later (BNPL) market has experienced significant growth over the past few years, driven by increased demand for flexible payment options, the rapid rise of e-commerce, and shifts in consumer spending habits. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 11.4% during 2023-2028. In Romania we are witnessing a high potential for rapid growth as far as BNPL is concerned, since both consumers and retailers become more inclined towards the benefits of such flexible payment solutions.
The Challenge
HeyBlu is an innovative fintech company that aims to become a key player in Central and Eastern Europe by empowering users with an array of financing options. Customers can seamlessly acquire products online, paying through installment payment solutions. This dynamic Romanian fintech is strategically integrated within eMAG, the largest eCommerce platform in the country, under the umbrella of Naspers, a major global eCommerce and technology investor. In 2023, HeyBlu enlisted the expertise of Zitec to optimize their embedded finance solution, enhance transaction capabilities, help scale up their business, and ultimately expand to international markets.
To tackle this challenge, Zitec deployed a multidisciplinary team of experts who meticulously assessed HeyBlu’s needs and developed a tailored middleware system based on micro-services. One of the main challenges of the system was meeting the needs of HeyBlu’s own retail partners, as part of their expansion strategy. Our common goal was to ensure the software could grow and evolve with their business, prioritizing scalability and adaptability.
Performance & streamlined processes
To scale and enhance their customer experience, HeyBlu decided to redesign their technical offering. With almost two years of experience in the financial services domain, HeyBlu recognized that the existing solution needed a significant overhaul to optimize the loan approval process, so an additional redesign of the processes had to be put in place to accommodate this migration.
Being integrated within the biggest online retailers in the region, they needed to be robust enough to accept high volumes of credit loans on a daily basis, avoiding delays in the process and not discouraging customers on the way. They also needed to be prepared for high-traffic seasons, such as Black Friday or similar events, to avoid bottlenecks and failures, in order to ensure a flawless journey.
For the end customer, the process had to be simple and frictionless, offering no additional headaches. They would just need to go through the normal purchase process and depending on the amount, select the right flexible payment method. They would then be assessed against data from local authorities and have their loan approved as quickly as possible.
For HeyBlu’s team, the process had to be streamlined and optimized, in order to ensure a seamless integration with existing infrastructures, and to improve efficiency by reducing redundant information, bugs and errors in loan processing, while cutting operational costs.
Scalability & resilience
A must-have feature of the revamp had to be scalability, both in terms of loan processing capacity, but also with regards to product configurability and adaptability to other potential core banking systems or retailers integrations.
Scalability was seen as an essential factor in the need for a system that can allow the quick development of new products and the easy integration of new merchants or systems. Resilience was another focus point for the development of an architecture as fail-safe as possible and for ensuring continuous uninterrupted system functionality.
“We needed to upgrade our technological and product offering towards the market. So we were on the look for a technology partner that could bring their expertise in a multitude of areas: software development, technical consulting, business analysis, cloud and DevOps knowledge, quality assurance procedures, and project management practices.”
George Iuhas
CTO HeyBlu
Timeline & pressure
A critical aspect of the project lay in the challenging timeline; the revamped solution needed to launch in less than 10 months, leaving enough time to prepare for Black Friday 2024. Recognizing the urgency, HeyBlu sought an experienced technical partner, ready to handle this huge and complex challenge. Not only would the solution need to be finalized on time, but also thoroughly checked for performance capabilities.
The Solution
The Middleware – integrating & orchestrating all the systems
In order to respond to HeyBlu’s needs, we developed a custom-built middleware system designed to enhance configurability, flexibility, scalability, performance, and efficiency. The system links HeyBlu’s new Core Banking Platform, with their payment service provider, as well as their e-commerce partners, allowing customers to benefit from installment plans.
The middleware was built on a micro-services architecture that offers scalability and flexibility to onboard various merchants and products, enhancing the overall agility of the solution and leveraging various technologies to achieve key outcomes.
The great thing about the middleware integration is that it also acts as a buffer, filtering out spam from the core banking system and reducing the likelihood of bugs occurring. Additionally, in the case of different failures from various integrated systems, the middleware architecture acts as a fail-safe mechanism, storing data and information securely.
Microservices Integration: Enhanced Efficiency & Collaboration
The fact that the 10 microservices are designed to run independently, while constantly communicating between each other, enables a continuous operational flow, while avoiding major system failures, and remaining flexible enough to be upgraded with modularity and ease.
The system leverages various technologies, in order to achieve maximum product configurability, seamless integrations with existing infrastructures and continuous system functionality, fostering long term growth and operational flexibility.
The integration of a complex set of microservices was not an easy task. But with Zitec’s array of expertise and mobilization of dedicated teams, the final integration was not only robust in the backend, but by paying great attention to details, came with an enhanced user experience for the end customer, who felt no burdens on the way.
“After analyzing the needs and challenges of our client, mindful of the technical requirements and the short timeframe, we assembled a diverse team with a mix of expertise, able to manage the project, from consultancy to launch. Success was driven by a culture of empowerment and ownership: every team member felt valued, and integrated seamlessly into our collaborative environment, in which we stayed focused and were supportive of each other along the way. Together, we turned the challenges that came about into effective solutions.”One of the most interesting features of the new system is that by using it, HeyBlu is able to store information, capturing critical snapshots of the user journey. This allows the team to identify potential bottlenecks in the loan approval process , which can lead to increases in loan approval rates.
Raluca Hotescu,
Senior Digital Products Analyst at Zitec
Change management
Since HeyBlu was going through a series of changes already, with their own migration to a new core banking system, Zitec’s team offered support throughout this change management journey. It was vital to carefully analyze the need that led to this change, as well as grasp what the impact on the internal teams at HeyBlu was.
Zitec’s senior technical team and business consultants, well known for their agile project management expertise and their experience in fintech as well as digital transformation, took the time to analyze their client’s business needs, processes and systems. They collaborated closely with HeyBlu representatives, in order to design a system based on efficient business flows, thus ensuring the project’s success.
This collaborative process further supported HeyBlu to refine their own approach, which ultimately resulted in a project that perfectly aligned with both their needs and those of their own e-commerce partners.
A trusting tech partner that can deliver fast
The secret ingredient to success was that Zitec worked hand in hand with the team at HeyBlu, tackling challenges and changes with proactivity and professionalism. Flexibility was key not only for the technical solution delivered, but also for the human interactions. Considering that the project underwent numerous adjustments during the implementation phase, the seasoned Zitec team skillfully anticipated and addressed evolving needs as they emerged.
“In our quest to find the right technological partner for our needs, we had several exchanges with different other companies in the market. We were immediately attracted by the technological architecture proposed by Zitec, as well as by the team brought forward. The proven experience with similar projects was a vital criteria for us and it proved to be the right decision reflecting Zitec’s top-tier status.”
George Iuhas
CTO HeyBlu
The Results
In just 7 months, we were able to launch our newly revamped platform for the end customers to utilize. Considering the complexity of the project, we were super impressed to have such a smooth transition.”
George Iuhas
CTO HeyBlu
The solution has been seamlessly launched and, since then, it has maintained continuous and uninterrupted functionality ensuring reliability for users. The rollout phase was smooth, very few bugs having been reported, indicating a high level of system performance.
The new system was built for scalability and configurability. Its robust design allowed the client to handle high-traffic periods without performance degradations. It also helped speed up time-to-market for new products significantly, from months to days, HeyBlu having already doubled their products portfolio, in just a couple of weeks from launch.
The impact on processes efficiency was significant, reducing redundant information, improving operational efficiency and leading to cost savings. The team saw a significant decrease in reconciliations, freeing up time for more important activities.
MIT (Merchant Initiated Transactions) and CIT (Customer Initiated Transactions) processing times have been thoroughly optimized, to be 3-4 times faster, achieving an average loan approval time of 36 seconds, significantly enhancing the user experience and customer satisfaction. This led to a 40% improvement in loan applications processing time and an almost 4% increase in daily conversion rates, which translated into impressive business growth.
