BNPL. Remember that because you soon will be using that abbreviation often.
It stands for Buy Now, Pay Later and it is just about the hottest trend in payments at retail.
Today’s US market is small, maybe $50 billion but forecasts show the BNPL market crashing into the many hundreds of billions of dollars by the middle of the present decade. And then the numbers start to get dizzily huge.
Why so much interest? Oldtimers will recall that BNPL was a staple of 1950s retail but as credit cards proliferated it receded into the background. But now it is again hot and that’s because it speaks to the purchasing needs and desires of Gen Z and young Millennials. Why don’t they just slap down a Visa card and put it on credit? The advantage of BNPL to them is that they know the total cost of purchase when they make it. The full payments amount, spread out over an agreed upon number of months, is there to see.
Pay the minimum on a credit card purchase and suddenly the total amount paid can vault much, much higher.
So the younger generations are hopping aboard BNPL which, right now, is largely used for consumer purchases of a few hundred dollars to maybe a few thousand.
Right now, too, it’s mainly fintechs that are playing hard in this space.
But Scottsdale AZ based equipifi is a fintech that wants to enable credit unions in particular along with some banks to play in this space.
In this podcast with co-founder and CEO Bryce Deeney you will hear about equipifi’s secret sauce which is software that can approve and fund a BNPL loan at retail in under a minute.
No application is required. No FICO score is checked.
The basis for the loan is knowledge of the history of the member’s checking (sharedraft) account and insight into how much surplus money generally is in the account. So that’s a solid basis for forecasting that this consumer can in fact handle this monthly payment.
In the podcast Deeney tells in detail exactly how equipifi works along with how it is integrated into the core.
Any credit union that wants more members under, say, thirty years of age needs to listen and take notes.
Keep listening and you will hear the equipifi has plans to roll out a BNPL service for SMBs too. How cool is that?
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