Citi credit card holders can now use the company’s Flex Pay option to buy products on Amazon, the financial services giant announced Monday (Aug. 3).
The buy now, pay later (BNPL) plan, in partnership with Amazon, allows Citi card users to choose from a variety of plans. There are three-, six, 12- and 48-month options.
Plans range from three equal monthly payments on purchases of $100 or more with a 6.74 percent promo rate to 36 or 48 equal monthly payments on purchases of $1,200 or more with 8.74 percent promo rate. However, Citi said that Flex Pay is an "on-card" financing program that automatically uses a customer's existing credit line. Cardholders don't need to seek separate approval for the loans, as they would with many other BNPL products.
Citi said more than a third of its active cardmembers made at least one purchase on Amazon in the past year and millions shop using their points to redeem for purchases through Shop With Points on Amazon.
“Citi and Amazon saw an opportunity to offer another convenient, easy financing option at checkout,” Citi said in a statement.
In July’s Buy Now, Pay Later Tracker, PYMNTS reported demand is rising for flexible payment options that allow consumers to make large purchases without incurring interest or debt.
About 30 percent of U.S. consumers have BNPL accounts. They allow consumers to delay payments for items they take home instantly. It’s been a way for shoppers to stretch their dollars in a financially trying time as the COVID-19 pandemic continues.
New York-based BNPL provider Splitit said it processed more than $65 million in merchant sales in the second quarter, a stunning 260 percent year-over-year increase.
Afterpay, the Australia-based installment payments firm, said it recently added more than 1 million U.S. users in 10 weeks. That’s as much as 40 percent rise in the rate of customers added weekly compared to January and February totals.
Nick Molnar, U.S. CEO and co-founder of Afterpay, told PYMNTS the BNPL trend is “in overdrive,” thanks to the pandemic. But it was trending already, he said, and the look ahead isn’t so much about COVID as it is about the consumer spending changes left in its wake.
“With this new face of retail emerging, it’s more important than ever that retailers offer a true omnichannel solution, both online and in-store,” Molnar said. “The most successful retailers, regardless of the type of merchandise and price point, are giving their shoppers several ways to shop across multiple channels, and they are offering payment options that speak to consumers’ desires for both flexibility and control.”
(This article has been updated with additional information.)