Are delivery apps becoming banks?

German food-delivery platform Delivery Hero announced plans to offer buy-now-pay-later (BNPL) services to its customers. The company also said that it may provide financing to vendors through partnerships with banks.

Why should we care?
By adding financial tools to its suite of offerings, Delivery Hero hopes to crawl out of the red at a faster pace. According to Emmanuel Thomassin, the company’s Chief Financial Officer, BNPL services could increase individual delivery order sizes as well as their frequency, helping “fuel the profit line.” It isn’t necessarily all that new for consumer goods providers to offer in-house or branded financing: from Ford Credit to department store credit cards. But the in-house injection of fintech into seemingly non-finance-y apps might add new urgency to the power struggle between scrappy startups and big banks. The latter faction has already called for greater governmental regulation in fintech, arguing that startups play by a different—and less costly—set of rules than more established entities. If Delivery Hero’s fintech pivot pays off, then we can be sure to see other apps follow suit, leading to a proliferation of fintech offerings—as an aggregate, arguably, a kind of quasi-decentralized finance. Regulators may begin to draft a new suite of rules to keep such a hybridized fintech world in check.