YouPay, a new payment sharing technology, is shaking up the payments sector by filling a gap in the market and providing shoppers with an external funding source that isn’t tied to financial debt.

YouPay enables shoppers to load up an online cart, then create a shareable link they can send to someone else to pay for their order at checkout, such as a family member or friend. This can help retailers reduce the number of abandoned carts, while increasing new customer acquisition and opening opportunities for deep data analysis.

The shopper picks out items from their favourite online retailer, chooses their preferred style and size, fills in shipping details and any loyalty information before sharing the payment page and final step of the checkout process.

The technology, developed by Brisbane-based fintech entrepreneur, Matt Holme, is an ideal solution when buying gifts for birthdays or events – which was the initial inspiration behind YouPay.

“I was looking to purchase a gift for my wife that she would choose, and I would pay for, but there was no way for her to send the checkout page from her phone to mine for me to enter the payment details. It dawned on us that I was the only other person who could make the payment as we were in the same room – but if there was someone else who wanted to pay, it wouldn’t have been possible,” he told Retailbiz in a recent interview.

“We realised there was nothing else on the market like YouPay so with my experience in web development, I was able to build an MVP and launch it into a Sydney merchant called Appliance Central, which experienced a 6% drop in abandoned carts with YouPay.”

Soon after, Culture Kings integrated the YouPay solution. With a predominantly younger audience with some customers under the age of 18, who are unable to access credit or apply for Buy Now Pay Later, YouPay can help them choose the items they want and have mum or dad pay for it.

“Mum or dad then receive what we call ‘pre-purchase exposure’ which provides them an insight into the chosen shoes before making the payment and potentially opens a conversation about financial wellness. Most importantly for merchants, mum or dad then become a customer of Culture Kings and start being incentivised to continue shopping for themselves. It ends up two customers for the price of one, which is a huge benefit for the retailer,” Holmes explained.

“Shoppers typically keep their shipping and billing information the same even if someone else is paying for the purchase. This means merchants don’t get any insights into who actually paid for the item. With YouPay, the merchant gets a profile from that type of data and can learn who the consumer is, and who the purchaser is, and from a security perspective, they can independently verify a person as one entity and run a fraud check before the item is shipped, so we decrease the security risk for the merchant.”

An element of security for the shopper is that none of their private information is displayed when the purchaser receives the YouPay link. “A person could potentially create a YouPay link and put it publicly on Facebook and crowdfund their purchase. The payer’s details are captured separately so it completely separates the shopper from the purchaser.”

YouPay is directly integrating into select merchants at a rate of two to three merchants per week, but this is expected to accelerate with the launch of a self-install automated onboarding process next month. “This will be a real enabler for growth, not only within Australia but globally. Our product was designed to be global from day one because what we are experiencing here in Australia, you can pick up the same product and place it in North America, for example.”

The self-install process allows merchants to do the integration with their own internal teams and be up and running with YouPay in as little as eight minutes.

“As YouPay is a universally shareable cart, as long as your ecommerce platform has a checkout page, then our cart can capture that information,” Holmes said.

Other added functionality that will become available in the next quarter includes integration into an abandoned cart email from merchants.

“YouPay can have a real positive impact on reducing the number of abandoned carts, so we are building technology that allows for an abandoned cart email to include a YouPay link. This will completely change the narrative from asking the same person the same questions about their items to ‘if you don’t want to pay for this yourself, here’s a link that you can share with anybody in your life who might be interested in buying it for you’,” Holmes explained.

Another heavily requested feature is the ability to split the cart – something YouPay is working on – ideal for someone who wants multiple items. “With this feature, I’d be able to choose a couple of items and the others could be sent to mum or grandma. And thanks to that one wish list, the merchant acquires the customer record of an entire family.”

‘Not trying to get rid of Afterpay or PayPal’

With the BNPL space becoming heavily saturated, this is transpiring into the early results seen by YouPay.

“Visa, Mastercard and PayPal are always the go-to options for the first segment of payments and then Afterpay leads the competition in the second segment of BNPL payments. But excitingly the third segment with YouPay – the shared payment segment – is being chosen above some of the lower tier BNPL providers,” Holmes said.

“It demonstrates that this concept of offering various BNPL options is not the best way forward for a merchant. Instead, customers want to see instant payments, BNPL and shared payments, from a merchant.

“We’re not trying to get rid of Afterpay or PayPal, but there’s a massive void in the market where you can’t have an external funding source that’s not tied to financial debt. We’re just stepping in to provide that option that is presently lacking.”

More than 200 retailers have formally indicated their intention to integrate the YouPay solution, including well-known names across the beauty, jewellery, electronics, sport, fitness and pet care categories, among others.

Retailers scheduled to come on board in the coming months include fashion brands Soda Shades and Apéro Label and sportswear brand LSKD. Indigenous clothing and homeware brand, Yarn, workwear-focused TradeMutt and Melbourne-based not-for-profit HoMie, are also on the list.