Credit Unions Exploring Buy Now, Pay Later Installment Products
Buy now/pay later (BNPL) installment products have become more popular throughout the COVID pandemic, with credit unions increasingly participating in offering the product. Typical BNPL products allow consumers to make large purchases by dividing the purchase into multiple monthly payments, with specific terms varying depending on the provider.
“Buy now/pay later is becoming much more popular in the general banking market,” said Tom Church-Adams, senior vice president for payment products at CO-OP Financial Services. “Consumers are out there making large purchases and soon this will be a standard feature for shopping.” CO-OP is a California-based credit union service that develops payment rails and technology for 3,500 credit unions with 30 million customers.
American Banker highlighted that while banks are increasingly offering a BNPL option to consumers, Amazon and Apple have also recently added BNPL products. Apple’s “Apple Pay Later” program will uniquely work both in stores and online through their broad acceptance footprint, while most BNPL programs are only for online purchases. Amazon recently announced plans to team up with fintech company Affirm to offer its BNPL options. Additionally, Square recently struck a deal to pay $29 billion to purchase Afterpay, an Australian fintech company founded in 2014.
“It feels like there’s an announcement or big news almost every other day in this space,” said Veronica Katz, chief revenue officer for Sezzle, a BNPL company in Minnesota.