UK-based retail lender Secure Trust Bank (STB) has agreed to buy AppToPay to enter the booming buy now pay later (BNPL) market.

Currently, STB offers point-of-sale retail financing services via its V12 Retail Finance business.

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The lender caters to over 1,400 retailers and 840,000 consumers and specialises in offering large and longer duration loans.

The deal, which awaits regulatory approval, will enable STB to offer smaller loans for a shorter duration.

STB plans to leverage AppToPay’s proprietary technology platform by integrating it with its systems to offer FCA regulated digital BNPL offerings.

The lender plans to launch this digital offering alongside its other retail finance products via the AppToPay brand in the first half of 2022.

Secure Trust Bank CEO David McCreadie said: “This transaction is a natural next step for us, opening up attractive new opportunities for our existing customers and providing us with access to a new, fast-growing specialist lending market.

“The credit market is undergoing a structural transformation; digital BNPL has already been welcomed by a large number of consumers in the UK and is fast becoming established as a mainstream alternative payment option due to its ease of use and interest-free pricing.”

“We have no doubt that this market will continue to grow rapidly, and that STB is very well-placed to capitalise on the opportunity.”

STB stated that the BNPL provider was acquired for a ‘small amount’ without disclosing the value of the deal.

It expects AppToPay to scale over time and become an ‘important incremental’ offering for the V12 platform.