Proposal

1. PROBLEM

1.1 Problems for customers when using traditional credit methods for spending on services:

First, traditional credit methods always come with high-interest rates and penalty fees. Consumers have to pay any fees when using credit cards such as card issuance fees, maintenance fees, late payment fees, cash withdrawal fees, and card cancellation fees. Furthermore, consumers are often advised by credit card companies or banks to open cards with attractive incentives but are not thoroughly informed about hidden costs, causing the situation of having to pay fees. The expense is unannounced and negatively affects your credit score.

• In March 2024, a customer using Eximbank’s credit card services suddenly received a debt notice of 8.8 billion VND because the account debt was 8.5% VND and 11% VND. This raises many concerns for customers when using credit cards by default even though the State Bank and Eximbank have subsequently determined the work and made appropriate adjustments.
• Annual fees for bank credit cards range from 200,000 VND to 1 million VND depending on the cardholder’s activities.
  Interest rates are also applied by banks to different types of cards. Interest rates at Techcombank from 19.8%-38.8%/year, at VPBank from 26.68%-45%/year, at VIB from 14.64%-35.52%/year, at MB from 12% -22.9%/year, Vietcombank from 15%-18%/year.

Second, credit cards often require complex card application procedures and a time-consuming process. To be issued a credit card, credit companies or banks often require cardholders to have a stable job, documents proving income, a statement of average monthly income, labor contract, and paperwork. owned property,…
Third, traditional credit methods often do not bring high flexibility to customers as customers must follow fixed payment terms and minimum amounts, with no flexibility in adjusting plans. Payment plan according to your financial ability.
Fourth, young consumers, especially Gen Z, have difficulty accessing traditional credit methods such as credit cards. The most basic condition when opening a credit card is documents proving income. Meanwhile, Gen Z young people have diverse work choices, with many different sources of income, different from fixed jobs like the office generation. For that reason, opening a credit card often makes Gen Z young people feel more difficult and complicated. Because they do not meet the credit score conditions, it is difficult for Gen Z to be approved for credit cards and loans for shopping needs.

1.2 Problems of customers in the online travel industry: 

First, the online travel industry is facing a major challenge from the increase in prices of travel services, which has contributed to increasing the difficulty in managing budgets for consumers’ trips. use. With airfare and hotel prices rising, controlling travel costs is more difficult than ever. According to a report by the Vietnam National Tourism Administration, the average price of tourism services has increased by 3.5% compared to the previous year, placing significant financial pressure on consumers just coming out of the pandemic. COVID-19.
Second, the shopping cart abandonment rate of the tourism industry (87%) is higher than all other industries in the retail category such as fashion, retail or essential goods… (TNMT, 2023) And the main cause of the problem This issue is the price difference between the initial cost and the final cost. Especially tourism products such as accommodation. More than a quarter of customers abandon their carts due to unexpected additional fees such as bank exchange fees and housekeeping fees, which are only revealed at checkout. (source: link)

2. SOLUTIONS 

2.1. LenKen provides a Buy Now Pay Later solution that solves customers’ problems when using traditional credit methods

According to Visa’s 2023 Consumer Payment Attitudes Study, 60% of Southeast Asian consumers favor Buy Now Pay Later for the app’s ease of use, and 46% say they use Buy Now Pay Later to Don’t have to use a credit card.
With the business strategy “Manage risk first, expand market later”, LenKen uses a prediction model with data selection to be able to take timely and effective risk management actions. confidently bring Buy Now Pay Later solutions that not only meet today’s great needs but also help customers solve problems and prevent risks of default:
Firstly, LenKen’s Buy Now Pay Later service applies a very low interest rate of 0.7% on average for customers’ installment payments, which helps reduce customers’ financial pressure and total payment amount. LenKen applies different penalty fees in case of late or non-payment by customers and ensures transparency in providing information about terms and fees to customers.
Second, the service registration process with LenKen is very simple and fast, this optimizes the waiting time for customer application approval and can meet customers’ timely consumption needs. To use LenKen’s services, customers can choose their favorite product on the website of the seller cooperating with LenKen and then choose to pay with LenKen using ID card or CCCD. Another way to register is for customers to do so through LenKen’s mobile application. The whole process only takes a few minutes, helping customers save time and promptly pay for their favorite items.
Third, LenKen provides Buy Now Pay Later service with highly flexible features for customers. Specifically, LenKen developed its own algorithm to calculate customer balance when choosing the Buy Now Pay Later supply strategy according to the limit, effectively optimizing time and minimizing 100% of system error calculations. In addition, in credit policy, LenKen recognizes the importance of rearranging debt repayment schedules to suit each customer’s situation. LenKen has developed its own algorithm to rearrange customers’ debt repayment schedules accordingly. with debt balance calculation algorithm. From there, LenKen confidently brings a convenient, smart and convenient service experience.
Fourth, with the “soft credit check” feature, LenKen can accept a limit for Gen Z customers who do not have much credit history with the requirement of being 18 years old. This helps LenKen reach the Gen Z market with great demand for credit and online payments, and has influence in changing payment behavior in Vietnam and around the world.

2.2. LenKen provides solutions to solve the problems of online travel industry customers

Firstly, LenKen cooperates with travel service providers and major brands to provide special and exclusive promotions and offers for customers using payment methods on LenKen, helping Customers save travel costs.
Second, to reduce high cart abandonment rates in the travel industry, businesses can adopt measures such as increasing transparency in displaying prices and additional fees upfront. Providing clear and detailed information about additional costs will help consumers have a more comprehensive view of the final cost of the trip.
In addition, when using LenKen’s BNPL service with a comprehensive service, customers will minimize the risk of incurring costs outside of the invoice with the supplier, which is also a difficult problem. The problem of tourism customers when buying spontaneous tour packages without a specific service contract.
Third, optimizing the checkout page to minimize the steps required and increase simplicity can also help reduce cart abandonment rates. According to research by the Baymard Institute, optimizing the checkout page can help reduce cart abandonment rates by up to 35%. Using advanced technologies to automatically fill in information and provide flexible payment methods is also an effective solution.