How an installment payment program helps credit unions compete
Buy Now, Pay Later (BNPL) offerings are popping up everywhere, from big banks to retailers to fintechs. While consumers enjoy the flexibility afforded by installment payment options, credit unions have an enormous opportunity to leverage this growing trend to improve their member 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 Zip. Big banks including Citibank, JP Morgan Chase, Citizens Bank and American Express have also introduced installment pay programs in recent years. The latest to enter the BNPL market: Apple just launched its 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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