Meet Elyn, a French startup that recently raised $2.7 million (€2.5 million) in a pre-seed funding round led by Headline and Sequoia Arc. The company wants to offer some flexibility when it comes to online payments for e-commerce. Instead of paying for the product before it ships, Elyn lets customers try the product before they buy it.
Zalando, a popular e-commerce clothing retailer in Europe, has turned the try-before-you-buy option into one of its key selling points. Essentially, Zalando’s customers have multiple payment options available when paying for items in their online cart. You can either enter your card details or use PayPal like any other of his websites.
However, you also have the option to pay later. This allows you to split large payments into several installments rather than a “buy now, pay later” option like Klarna. After the user enters their payment card details, the card will be charged a few days after receiving the item.
This way, if you change your mind and want to return the item, you can block the payment before it occurs. This is especially important if you sell clothing, as choosing the right size can be difficult. Also, the actual appearance may differ.
In particular, Zalando Payments employs over 300 people. This demonstrates the importance of the company’s in-house payment solutions. If you manage to find the same t-shirt at Zalando or another clothing store, you can decide to buy from Zalando based solely on this feature.
Make “try before you buy” mainstream
Many businesses can benefit from this kind of payment experience. This is especially important in France and other European markets where credit cards are not as widespread as in the US. The product currently integrates with Shopify, with other ecommerce platforms coming soon.
When you start thinking about try-before-you-buy, you realize that it’s inherently tied to returns. That’s why Erin not only offers a trial before you buy, but also handles a return system.
Elyn co-founder and CEO El Mehdi Hachad said: “We also help retailers with returns, so return requests are converted directly to exchanges in the returns interface we provide.”
When a customer wants to return an item, Elyn asks a few questions to narrow down the reason for returning the item. Are they different sizes or are they different colors? Want your money back? Want the same product in a different size? Want another item? Want a gift card?
If people simply want to get a refund, Elyn offers gift cards with a little more than the amount they originally spent so retailers don’t have to spend money from their cash balance.
If a customer wants a different size of the same item, Elyn can check the retailer’s inventory directly and put the item aside if it’s in stock. Depending on the option you choose, Elyn can seamlessly coordinate future card transactions. This is a smoother experience for end-her customers. Because you don’t have to send the item back, wait for a refund, or buy another one a week or two later.
By default, Elyn is given 5 days to decide whether or not to keep something. The startup will track the package, explain the payment details when the package arrives, and allow you to send an email with a link to the returns portal.
To avoid payment defaults, Elyn uses pre-authorization requests to verify the validity of Visa, Mastercard, and CB cards. Startups charge transaction fees based on successful sales minus revenue.
“We’re looking at different payment options and services, and we want to offer something for every use case,” says Hachad. Some customers just want to enter their card details and move on. Some people prefer to pay only with PayPal. Some prefer to buy now and pay later using Klarna, Alma, Scalapay or another of his BNPL payment options. In some cases, customers love the convenience of his Apple Pay.
And now, Elyn thinks she can add another logo to her checkout flow for people who want to slow down their online payments a bit. All of these payment companies are working on cart abandonment. Adding options can improve conversion rates. And it’s true that improving total merchandise volume is a good way to persuade online retailers to use your payment products.
In addition to Headline and Arc, Motier Venture (Galeries Lafayette owners family office), Financière Saint James, Marc Menasé (Founders Future) and Guillaume Princen also invested in the startup.
