Capital One to test BNPL with a point of sale offer



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Capital One will test a buy now, pay later (BNPL) product as consumer lending sees competition intensify, Reuters reported.

FinTech companies have made it possible for traders to offer cheap financing for purchases, according to the report.

The company’s BNPL test product will come with point-of-sale (POS) loans for a limited set of traders Capital One has previously worked with, according to CEO Richard Fairbank, according to the report. He said the company will analyze the test results to see exactly how the products are doing and how they may appeal to traders and consumers.

BNPL’s popularity is due to support from venture capitalists and traders willing to subsidize interest charges, Fairbank said, according to the report. Growth is not to be taken lightly.

“The elephant in the room is the sustainability of the subsidy to traders,” Fairbank told Reuters. “This is fueled by the belief of traders that they are getting additional volume. “

One concern with BNPL’s services is that they could potentially hurt a rebound in loan income for those who use credit cards to borrow, according to the report.

Customers have made a habit of paying off their credit card balances for a year and a half amid the pandemic, eliminating interest charges. Some of them were tempted to use BNPL to purchase items, but then fell behind in payments, raising interest charges, according to the report.

In other BNPL news, the profits of many companies like Affirm, Afterpay, PayPal and others have shown the vitality of BNPL. PYMNTS has estimated that approximately 29 million Americans have used BNPL’s services to pay for at least one item in the past 12 months.

Read more: Affirm, Afterpay, PayPal Earnings Show BNPL’s Explosive Growth and Potential

Affirm, for example, saw its revenues increase by 71%, while Afterpay was acquired by Square and posted double-digit growth.

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NEW PYMNTS DATA: SELF-SERVICE SHOPPING ROUTE TODAY – SEPTEMBER 2021

On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.

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