Rent-To-Own Looks For Its Place In A BNPL World


Much has been written about buy now, pay later (BNPL) in recent months, and for good reason. Major payments players are stepping in, including Visa, Mastercard and Discover; and last week, Square announced plans to acquire Afterpay for $29 billion.

But before there was BNPL, there was lease-to-own — and while not making as many headlines, it can fill a gap that BNPL leaves open. Last week, Acima, the virtual lease-to-own FinTech arm of Rent-A-Center, rolled out a digital platform focused on improving the retail leasing experience, including a new Acima mobile application, an online shopping platform and a browser extension. Acima’s LeasePay Card, unveiled in April 2021, is now accessible through the mobile app, too.

See: Rent-A-Center’s Acima Unveils Digital Retail Leasing Platform

On The Record

“The traditional retail shopping payment system, primarily comprised of cash, credit cards and debit cards, essentially excludes a large segment of the population — the financially underserved.”
—Jason Hogg, executive vice president of Acima

“If your refrigerator breaks down and you’ve got three kids, you can’t wait until your next paycheck to hopefully buy a new one. And if you don’t have the credit access to put it on a private-label credit card, you surely aren’t going to take a refrigerator and split it over four payments.”
—Orlando Zayas, CEO of Katapult

Read more: Katapult CEO: Lease-to-Own Plans Offer Non-Prime Alternative To BNPL

By The Numbers

  • 45: percentage of customers that return to Katapult
  • 9: average of number of leases per customer
  • 29,000,000: adult consumers have used BNPL in the last 12 months
  • 26: percentage that could not have made a purchase without BNPL

Complementing, Not Competing

Zayas told Karen Webster lease-to-own is not a BNPL offering, nor is it competing with BNPL providers. Rather, the offering is complementary. When a consumer applies for financing with Affirm, for example, and Affirm can’t approve the offer, consumers find themselves using Katapult.

“We’ve had to learn how to tailor our models to better capture that data, make a determination on that consumer within five seconds and do it the right way so we [mitigate risk],” Zayas said. That’s a tall order, especially with the limited data the firm has to render such decisions, but it’s also a big opportunity.

Both Rent-A-Center and Aaron’s in recent years have transitioned to centralized decision-making processes as eCommerce has grown, which has expedited the consumer approval process and increased digital payments at both retailers.

“The great thing is with centralized decisioning and the improvements in operations is just how dialed in our teams are right now,” Aaron’s Chief Financial Officer C. Kelly Wall told analysts on the company’s earnings call last month. “We feel like we’re reacting pretty quickly.”