Thanks in part to the rise of eCommerce and digital payments during the pandemic, Buy Now, Pay Later (BNPL) offerings are popping up everywhere, from big banks to retailers. While consumers enjoy the flexibility afforded by installment payment options, credit unions have an enormous opportunity to leverage this growing trend to better serve their members and grow their primary financial relationships.
According to a report from Financial Technology Partners, the total market potential for installment-type programs is $5 trillion in the U.S. alone. Worldwide, the channel will account for over 4% of payment transaction volume by 2024, a 100% jump from 2020.
The market is currently dominated by fintech upstarts like Affirm, Klarna, Afterpay and Uplift. Big banks including Citibank, JP Morgan Chase, Citizens Bank and American Express have also introduced installment pay programs in recent years. Even more concerning, Apple is poised to join the parade later in 2021, when it launches the Apple Pay Later program with Goldman Sachs as its partner lender. The convenience of financing a purchase at the point of sale right from your iPhone will certainly be attractive to many consumers.
But unique among financial services providers, credit unions are in the perfect position to get in the installment payment game.
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