Buy Now, Pay Later (BNPL) and Credit Unions

Buy Now Pay Later (BNPL) for credit unions from cu 2.0 and equipifi

Buy Now, Pay Later (BNPL) is the biggest payments trend that credit unions aren’t using.

That needs to change ASAP.

Don’t worry—we’ll back up this assertion with a data and research. Sure, we’ll make an appeal to member service and providing payment solutions to those who lack options.

But mostly, we’ll let the numbers speak for themselves.


What Is Buy Now, Pay Later?

BNPL is a payment method that allows consumers to spread individual purchase payments over time. Essentially, it’s installment pricing. Typically, BNPL asks for four payments over time—often two weeks apart, but sometimes more (such as monthly or quarterly).

Often, there’s no interest involved. No credit score required, either. And frequently, there are no fees.

BNPL has proven very popular with people who don’t use credit cards. It allows them to make purchases without seeing an immediate and substantial hit to their wallet.

And it’s becoming incredibly popular, incredibly quickly.


BNPL Statistics to Watch

To be clear, there are too many important statistics to mention here. But we’ll give you enough numbers to paint a clearer picture:

81.2% year over year growth. Previous years have seen BNPL increase by anywhere from 20–50% on average. 2021 accelerated this growth. 2022 is predicted to build on that trend.

Over $100 billion. That’s the amount consumers spent in BNPL channels in 2021. Compare that to 2020’s $24 billion… you can see why BNPL volume is expected to reach 15 times its current level by 2025.

$75,000 annually. That’s the average income of a BNPL user. In fact, BNPL consumers are pretty evenly spread across income brackets, from under $20k to over $100k annually.

These statistics are just the tip of the iceberg. We could mention about how the average age for BNPL users is the elusive ~37, or that usage is up by around ~100–400% across generations…

But far longer, more comprehensive articles and studies can give you all the BNPL statistics you’ll need.

What’s important are the trends that those numbers above suggest:

Buy Now, Pay Later is exploding… and credit unions are (almost) nowhere to be found.


How Credit Unions Can Participate

BNPL payments have already surpassed predictions from 18 months ago. Credit unions can’t afford to be on the outside looking in. This blog isn’t just about BNPL for credit unions—it’s also about introducing a CU-focused solution

equipifi is the leading BNPL player for credit unions. Their founder and CEO, Bryce Deeney, spent years as the VP, Payments at Alaska USA.

That’s some serious credit union credentials.

Here’s how equipifi works (in a nutshell):

  1. A member makes a purchase. Maybe it’s a couch, a TV, or a really cool hat…
  2. That member immediately gets a buy now, pay later offer. They’ll see installment options and pre-generated plans on your branded offer landing page.
  3. The member accepts an offer. The process is seamless, intuitive, and on their existing mobile banking app.
  4. Cash gets deposited into the member’s account. It reimburses part of the original purchase—installment withdrawals can occur automatically thereafter.

This is oversimplified, of course. You’d have to dig further into equipifi to learn more about what’s in their secret sauce.

But what’s important to note is the flexibility of this option. Whereas most BNPL options occur at the merchant site (such as while shopping online at BestBuy or Target), equipifi-powered BNPL offers members BNPL convenience from pretty much anywhere.


What Credit Unions Should NOT Do

Buy Now, Pay Later is an important payment option for many reasons. For example…

  • It helps lower-income members afford larger items;
  • It allows middle- and high-income members to make large purchases while more effectively managing deposits and cash flow;
  • It effectively provides credit without requiring credit; and
  • It offers clear payment alternatives that may affect purchasing decisions.

We love that equipifi is leading the charge to provide flexible payment options to members. We don’t love the way some credit unions have responded to being left out of the first wave of the BNPL revolution.

Only two credit unions appear in cursory Google searches related to BNPL and credit unions. Both results are vaguely informative and highly cautionary. This suggests that many credit unions may be warning their members off of Buy Now, Pay Later options.

We suspect these credit unions don’t want to lose out on payments to the likes of PayPal, Affirm, Klarna, and Afterpay. However, as with other consumer experience-centric strategies, we think it’s best to give members what they want—if you don’t, they’ll get it elsewhere.

With equipifi, you decide the terms by which your members engage in BNPL spending to ensure that it guarantees their long-term financial health. After all, who knows your members’ financial goals better than you?


Additional Resources

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