Green Sheet interviews ChilliMint Europe's Santosh Nakra-Shah

Buy now, pay later (BNPL) changed the payments landscape by making financing a seamless part of the checkout experience. Now, as new UK regulations governing BNPL take effect, providers face the challenge of balancing the frictionless customer experience consumers have come to expect with stronger affordability checks and consumer protections.

In this Q&A, Santosh "San" Nakra-Shah, co-founder and managing partner of ChilliMint Europe Ltd., discusses why BNPL's greatest innovation was making credit "invisible," how the new regulatory framework is likely to affect consumers, and what the future holds for embedded credit across payments and commerce.

Green Sheet: You feel that BNPL's true innovation was making credit "invisible" at checkout rather than inventing a new form of lending. What do you mean by that, and why does the distinction matter?

Santosh Nakra-Shah: People often say BNPL reinvented lending. I don’t think it did. Consumers have been borrowing to spread the cost of purchases for decades. What BNPL changed was where and when credit appeared. Instead of having to apply for finance either before or after leaving the checkout, the option to spread the cost became part of the purchase itself. 


That's what I mean when I say credit became "invisible." Consumers still knew they were borrowing, but it no longer felt like a separate process. It was now seamless.


This changed expectations. Once finance became part of the buying journey, people stopped thinking about applying for credit and started expecting it to be there when they needed it. That's an important distinction because it changes how we think about product innovation. The opportunity isn't reinventing credit. It's reinventing how people experience it.

GS: Now that the FCA's BNPL rules are in effect, which aspects of the customer experience do you expect to change and which do you believe will remain essentially the same?

SN: Customers will notice less change than many people expect. Most of what's changing will happen behind the scenes rather than in the customer journey itself. Providers will have to carry out more robust affordability checks, which means some people who might previously have been approved won't be, or they'll be asked for a little more information. That's exactly what the regulation is designed to do, and I think it's the right move.

For most people who are approved, though, I don't think the experience will change dramatically. Consumers have become used to seeing the option to spread the cost at the point they're making a purchase, and I don't see that disappearing. If anything, I'd expect providers to work even harder to make those additional checks feel as seamless as possible.

Good regulation shouldn't make customer experiences worse. It should make sure they're built on responsible lending. The best providers will be the ones that manage to do both.

GS: If consumers have come to expect financing to appear seamlessly within the purchasing journey, who is best positioned to deliver that experience over the next five years: banks, fintechs, merchants, card issuers or someone else? Why?

SN: I actually think that's the wrong way to look at it. This isn't a winner-takes-all market. Each player is solving a different problem. Companies like Klarna, Afterpay and Affirm changed the market, but not because they invented installment lending.

We've had hire purchase, retail finance and store cards for decades. What they changed was how people experienced borrowing. They proved that embedding finance into the checkout created value for everyone. Merchants saw higher conversion, consumers got more flexibility, and lenders reached customers at exactly the right moment.

Over the next five years, I don't think consumers will care who's providing the credit. They just want it to be quick, straightforward and available when they need it. Merchants are focused on conversion and making the experience as seamless as possible. Banks and card issuers are thinking about funding, risk and regulation. They're all looking at the same transaction through a different lens.

Going forward, the organizations who will succeed will be those who can collaborate across the value chain, seamlessly bringing all the players together to create the best experience. That's why I don't think this becomes a battle between banks, fintechs or merchants. The real opportunity is creating an experience where the customer never has to think about who's behind the lending because every part of the journey simply works.

GS: Some critics argue that frictionless access to credit can encourage overspending. How can the industry preserve the convenience consumers value while promoting responsible lending and regulatory compliance?

SN: It's a fair challenge. The way a payment option is presented can influence someone's decision to buy. That's not unique to BNPL. Credit cards, interest-free finance and store finance have been doing that for years. BNPL simply made the experience much more seamless.

The real question isn't whether payment options influence behavior. They do. The question is whether people understand what they're signing up for and that they can genuinely afford it. That's why the new affordability checks and clearer consumer protections matter. The goal shouldn't be to make every customer jump through unnecessary hoops. It's about identifying when someone may be at risk, putting the right checks in place, providing clear information and allowing everyone else to have the straightforward experience they've come to expect.

Convenience and responsible lending don't have to be at odds. The best products will be the ones that give consumers flexibility without losing sight of the responsibility that comes with lending.

GS: Do you see the BNPL model influencing other forms of consumer or commercial credit beyond retail purchases? If so, where do you expect that evolution to happen first?

SN: Absolutely, but I don't think this is really about BNPL anymore. It's about embedded credit and how customer expectations have changed. Technology has a habit of resetting expectations. Once people experience a simpler way of doing something, it's very difficult to persuade them to go back to the old way. I think embedded credit has done exactly that for lending.

It's not just consumers driving that change either. Merchants have invested heavily in creating smoother buying experiences, so the last thing they want is unnecessary friction at the point someone is ready to buy. The simpler that journey is, the more likely a customer is to complete their purchase.

That's why I think we'll see this approach spread much further. Whether it's healthcare, home improvements, business equipment or travel, wherever finance still feels like a separate process, there's an opportunity to make it part it feel like a natural part of the purchase instead.

I don't think the next wave of innovation will come from inventing new lending products. It'll come from making finance available at the moment it's needed, in a way that feels simple for customers while still delivering the right safeguards.

GS: What should payments providers, lenders and merchants be doing today to prepare for a future in which embedded credit becomes an expected part of the customer journey, regardless of the specific product offering?

SN:I think the biggest mistake organizations can make is continuing to think of lending as a separate journey. Customers increasingly expect decisions to happen in the background, not as something that interrupts what they're trying to do.

We've spent years removing friction from payments. Every time you tap your card, there are multiple checks happening in micro-seconds, but as customers we barely think about them. I think lending is heading in the same direction. The challenge isn't removing the checks, it's making them happen in a way that feels seamless.

For lenders and payments providers, that means investing in the technology and data needed to make fast, responsible lending decisions. For merchants, it means choosing partners who can deliver a great customer experience without compromising on affordability or compliance. The winners won't simply be the organizations with the best lending product. They'll be the ones that make the whole experience feel effortless because the customer never feels like they've been taken out of their journey.

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