Meet Elyna new French startup that recently raised a $2.7 million (€2.5 million) pre-seed funding round led by Cup and Sequoia Arc. The company wants to offer some flexibility when it comes to e-commerce online payments. Rather than paying for items before they even ship, Elyn lets customers try before you buy.
This experience may sound familiar if you’ve purchased items on Zalando, a popular e-commerce clothing retailer in Europe that has made its try-before-you-buy option one of its main selling points. When it comes time to pay for items in your online shopping cart, Zalando customers are essentially given multiple payment options. They can enter their card details or use PayPal like any other website.
But they also have the option to pay afterwards. This isn’t a Klarna-esque “buy now, pay later” option with the option to spread a large payment over several installments. Users enter their payment card details and their card is charged a few days after receiving the items.
This way, if you’ve changed your mind and want to return an item, you can block the payment before it takes place. This is especially important if you sell clothing, as choosing the right size can be difficult. Items may also look different when you see them in real life.
There are more than 300 people work specifically for Zalando Payments. That gives you an idea of the importance of the company’s in-house payment solution. If you can find the same T-shirt on Zalando or in another clothing store, you can only decide to buy from Zalando based on this feature.
Making ‘try before you buy’ mainstream
Many businesses could benefit from this type of payment experience. That is why Elyn wants to offer try-before-you-buy to smaller retailers and brands. This is particularly important in France and other European markets where credit cards are nowhere as widespread as in the US. The product currently works with Shopify and will soon work with other ecommerce platforms.
Once you start thinking about try-before-you-buy, you realize it’s intrinsically linked to returns. That is why Elyn not only offers try-before-you-buy, but also the return system.
“With try-before-you-buy, you only pay for what you decide to keep,” Elyn co-founder and CEO El Mehdi Hachad told me. “We also help retailers with their returns, so that return requests are converted into exchanges right in the returns interface we provide.”
When a customer wants to return an item, Elyn asks you a number of questions to find out the reason why you want to return something. Is it the wrong size or the wrong color? Do you want to get your money back? Do you want the same item in a different size? Do you want another item? Do you want a gift card?
If people just want a refund, Elyn will offer you a gift card with a little more money than you originally spent, so that retailers don’t have to spend money from their cash balance.
If customers want the same item in a different size, Elyn can look directly into the retailer’s stock and put the item aside if it’s available. Depending on the option you choose, Elyn can seamlessly adjust the upcoming card transaction. This is a smoother experience for the end customer, as they don’t have to send something back, wait for the refund, and buy something else a week or two later.
By default, Elyn gives you five days to decide if you want to keep something or not. The startup tracks packages so it can email you when your package arrives to explain payment details and include a link to the returns portal.
To prevent payment defaults, Elyn uses pre-authorization requests to verify the validity of Visa, Mastercard and CB cards. The startup charges transaction fees based on successful sales net of returns.
“The way we see the variety of payment options and services is you want to offer something for every use case,” said Hachad. Some customers just want to enter their card details and move on. Others only want to pay with PayPal. Some people want to buy now and pay later with Klarna, Alma, Scalapay or another BNPL payment option. In some cases, customers appreciate the convenience of Apple Pay.
And now Elyn thinks it can add another logo to the checkout flow for people who want to postpone their online payment a bit. All of these payment companies are tackling shopping cart abandonment. Adding more options can improve the conversion rate. And it’s true that improving gross trading volume is a good way to convince online retailers to use your payment product.
In addition to Headline and Arc, Motier Venture (the family office of the owners of Galeries Lafayette), Financière Saint James, Marc Menasé (Founders Future) and Guillaume Princen also invested in the startup.
