Buy now, pay later (BNPL) point-of-sale credit is such a productive lending model that giant financial brands are getting into the act, adding debt consolidation, home improvement and unsecured loans to the core business of instant consumer credit that BNPL is built on. Consider Goldman Sachs’ MarcusPay, an instant-credit app that provides loans from $750 to $10,000 using a simplified, expedited application process.
JetBlue and Goldman Sachs announced this week that they’re teaming up to allow travelers to use MarcusPay to travel now, pay later on JetBlue flights. That expands on an earlier deal to provide MarcusPay as a BNPL option for JetBlue Vacations packages of hotels and airfare.
It’s the latest wrinkle to installment financing that staking a claim as a post-pandemic, go-to resource for a surprising variety of borrowing, including for air travel. “With MarcusPay, we’re adding more flexibility and simplicity to the JetBlue travel booking process,” said Andres Barry, president, JetBlue Travel Products. Barry noted that the initiative will allow customers to lock in a fixed-rate loan they can repay over time, “removing some of the hassle and added costs of planning a vacation.”
Elisabeth Kozack, Marcus’ head of consumer lending partnerships, added that MarcusPay “gives customers a smart alternative to financing large purchases.”
Visa And Citi Are Also In The Game
Goldman is hardly alone among global financial brands tapping into BNPL action. For example, Visa recently began piloting its new Visa Installments product.
Cetin Duransoy, Visa’s global head of installment solutions, recently told PYMNTS CEO Karen Webster that with Visa Installments, “our focus is on enabling the enablers and accelerating the direction of our product. Given how much the demand for installments is increasing, we are also using the already existing parts of the credit system today to scale installment payments with every [Visa] card across the board.”
“The first U.S. phase of Visa’s push for installment payments’ ubiquity starts today, with credit card products, with the announcement of several installment plan pilots, PYMNTS reported, adding that, “TSYS is the first issuer technology partner to offer Visa’s new installment solution so that participating financial institutions can, in turn, offer installment plans to their cardholders. Commerce Bank is the first U.S. issuer to launch an installment plan pilot to selected Visa cardholders.”
Citi is also making a BNPL move with its new Flex Pay option to buy products on Amazon. “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,” PYMNTS reported. “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.”
Additionally, Citi is also offering Citi Flex Loans, a program with similar features but larger loan balances.
COVID Speeds Adoption Up
The new players are entering a space pioneered by brands like Australia-based AfterPay, whose efforts since 2016 have helped familiarize millions with BNPL. The company was already on a solid growth path, but COVID-19 has kicked things into high gear.
“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,” Nick Molnar, U.S. CEO and co-founder of Afterpay, recently told PYMNTS. “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.
PYMNTS Provider Ranking of Alternative Credit Apps tracks activity in the BNPL and installment payments space, where the top five players have held steady throughout 2020. POS credit brands that currently dominate the sector based on PYMNTS’ latest rankings are, in order, Klarna, AfterPay, Affirm, Zip, and QuadPay.