Degree
Master of Business Administration
Faculty / School
School of Business Studies (SBS)
Advisor
Dr. Irum Saba, Associate Professor & Program Director MS-IBF, Institute of Business Administration, Karachi
Client
Bank Alfalah
Project Type
MBA Research Project
Keywords
BNPL, Buy Now Pay Later, Bank Alfalah, Ecommerce, Credit Cards
Abstract / Summary
In this report we have studied the feasibility, scalability, and market potential of Bank Alfalah’s Alfa Islamic Buy-Now-Pay-Later (BNPL) product, which is an Islamic Consumer Finance Facility offering short-term deferred payments to consumers for their online purchases. This report evaluates the product’s business model, market readiness, and strategic considerations for achieving scalability and operational viability. We conducted a detailed market analysis which highlighted strong demand for Islamic BNPL services, with 80% of survey respondents showing interest. Economic pressures, such as inflation, enhance the appeal of installment options, making Alfa Islamic BNPL an attractive choice in a volatile financial environment and the tech-savvy e-commerce consumers. In our interviews, Merchants are cautiously optimistic but expressed concerns over the MDR (Merchant Discount Rate), indicating a need for strategic adjustments. The business model for Alfa Islamic BNPL is grounded in Islamic finance, with revenue primarily generated from MDRs rather than interest, aligning with Shariah principles. A tiered subscription model is being proposed which is aimed at incentivizing adoption and providing a scalable revenue model. Quick market adoption is expected to drive growth, with PKR 5 billion in disbursements anticipated by 2024, contingent on effective partnerships and customer education. Our offered go-to-market strategy combines digital marketing, and in-app financial literacy programs to drive adoption. Targeted messaging and cross-promotions with merchants will promote BNPL services to the target demographic. We have also proposed a soft-launch strategy to gradually but organically penetrate the market. In conclusion, Alfa Islamic BNPL is strategically positioned to succeed in Pakistan’s financial market, leveraging Bank Alfalah’s strengths in risk management and Shariah-compliant offerings. With careful execution of the proposed tiered MDR structure and go-to-market strategy, Alfa Islamic BNPL has the potential to secure a significant market share, supported by strong performance metrics like sales volume and merchant participation.
Recommended Citation
Ahmed Bukhari, S., Naeem, S., Kamran, A., & Shaukat, S. (2024). Bank Alfalah: Feasibility, Acceptability, and Viability of Bank Alfalah (Alfa) Buynow-Pay-Later (BNPL) Facility (Unpublished graduate research project). Institute of Business Administration, Pakistan. Retrieved from https://ir.iba.edu.pk/research-projects-mba/321
