Tamara primarily generates revenue by charging a commission to the stores that are registered with them and utilize their Buy Now Pay Later (BNPL) service. Customers who use Tamara's service are not charged directly.
Understanding Tamara's Revenue Model
Tamara operates on a business model where its income is derived from merchants, not consumers. This approach aligns with many "Buy Now Pay Later" platforms that aim to boost sales for retailers by offering flexible payment options to customers.
- Commission from Merchants: Tamara charges a percentage-based commission on transactions made through its platform. When a customer chooses Tamara at checkout, the store pays Tamara a fee for facilitating that sale and the subsequent payment plan. This commission is Tamara's primary source of income.
- No Direct Customer Fees: A key aspect of Tamara's model is that it takes nothing directly from the customers. This means customers can use the service to split their payments without incurring interest, hidden fees, or charges from Tamara itself, provided they make their payments on time. This makes the service attractive to shoppers, which in turn drives more business to the registered stores.
Why Merchants Pay Commission
Stores are willing to pay a commission to Tamara because integrating such a payment solution can lead to several benefits:
- Increased Sales: Offering flexible payment options often encourages customers to complete purchases they might otherwise abandon, or to buy higher-value items.
- Higher Conversion Rates: The convenience of deferred payments can reduce cart abandonment rates, converting more browsers into buyers.
- Broader Customer Base: Attracting customers who prefer or require flexible payment options.
Who Can Use Tamara?
While not a direct part of how Tamara makes money, understanding its user base is vital to its market strategy. To use Tamara's services, customers must meet specific eligibility criteria:
- Citizenship: Users must be citizens of either Saudi Arabia or the United Arab Emirates.
- Age: Users must be at least 18 years of age.
These criteria define Tamara's target market within the GCC region, influencing its operational focus and merchant partnerships.
Summary of Tamara's Financial Model
| Revenue Source | Payer | Description |
|---|---|---|
| Commission Fees | Registered Stores | Tamara charges a percentage of the transaction value from merchants for facilitating purchases. |
| Direct Customer Fees | None | Tamara does not charge customers directly for using its Buy Now Pay Later service. |
This model incentivizes Tamara to help its partner stores succeed, as their success directly correlates with Tamara's transaction volume and, consequently, its commission earnings.
