Artificial intelligence is no longer a future concept for credit unions. It's rapidly becoming a strategic business tool capable of improving decision-making, enhancing member experiences, and increas...
Buy now, pay later (BNPL) — few things sound more appealing than that.
In today’s culture, the prospect of receiving the things you want or need right now without having to immediately fork over your cash can be a convincing selling point for many.
This idea is only emphasized by the fact that, according to GlobeNewswire, the BNPL market experienced a compound annual growth rate of approximately 20.3%.
That growth is not expected to end anytime soon, which begs the question — how can financial institutions reap the benefits of this innovative payment solution?
Buy Now, Pay Later: What Is It?
Before your institution considers how you can grow with BNPL, you must first understand what it is. This revolutionary payment solution is a personal loan that offers short-term financing, enabling consumers to make purchases and pay for them in multiple installments.
The personal loan can be extended to the consumer before, during, or after the point of sale, ultimately allowing them the flexibility to fit those purchases into their budget.
How BNPL Works
While the specifics of buy now, pay later plans may differ across providers, they typically operate as short-term financing solutions characterized by fixed payment schedules. This allows consumers to know what to expect from the loan, as they are made aware of the payment and interest amounts before entering into the agreement.
While this may seem similar to the workings of credit cards and other forms of loans, the greatest differentiator of credit union BNPL is that the defined term & interest rate make it a low-cost credit option with no application required, which ultimately creates an attractive offer for your members.
The Key Advantages
There are many advantages to BNPL — for your financial institution and your account holders. Offering BNPL on your debit cards will give you a competitive edge by enhancing the account-holder experience, and boosting satisfaction scores and retention rates.
Account holder benefits include:
- Convenience
- Flexibility
- Budget-friendly terms
- Easy access via mobile banking
The New Payment Solution for Millenials and Gen Z
BNPL just may be the payment solution that changes the financial industry, especially considering how popular it is with both Millennials and Gen Z. According to CNN Business, more than half of the younger adult generations have reported using BNPL services at least once.
The revolutionary payment solution can be incredibly alluring thanks to its greater financial accessibility, especially to young adults who feel hesitant or struggle to get approved for credit cards.
BNPL’s popularity with young adults will continue to rise, and just may extend into the other generations, indicating a need for financial institutions to hop on the trend before they fall behind in the race.
Are You Ready to Revolutionize Your Payments?
The future of payments is happening now. Offering BNPL to your account holders can be a great way to prevent them from moving their business to third-party buy now, pay later platforms. Reap the benefits of the payment solution today with SWBC and equipifi—the leading BNPL platform for financial institutions and the only fintech that enables the service for credit unions.
equipifi has been built to specifically benefit financial institutions and credit unions, seamlessly integrates with their clients, creating a beneficial partnership for all.
Ready to take the next step? Contact us today, and an SWBC representative will help you get started!
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