Visa is joining the fast-growing ranks of Buy Now Pay Later (BNPL) services. The payments giant has quietly launched its Visa installment solutions, allowing card issuers to opt for installment payments instead of credit card payments.
Visa Adds Buy Now, Pay Later Feature
Buy Now, Pay Later services are surging in popularity. These BNPL services allow customers to finance purchases in set installments, forgoing the debt that comes from traditional credit cards. BNPL will enable users to pay off those purchases without interest – for an additional set-up fee.
Visa is now looking to gain a share of the BNPL market with a new service: Visa Installment Solutions. The new Visa Installment Solutions is an API that card issuers can request, allowing them to offer Buy Now, Pay Later benefits to their customers. The API will work off the company’s Visa Developer platform and s expected to be released on a pilot trial soon.
BNPL Is a “Red-Hot Space”
“There’s overwhelming demand in this red-hot space,” Visa’s Mary Kay Bowman told San Francisco Business Times in an interview. “Consumers want choice. If you look at markets around the world, it’s hard to find one where installments usage isn’t increasing.
“The Visa installment solution has benefits for everyone in the ecosystem,” Bowman added. “It lets issuers give cardholders buy now, pay later options on existing credit lines, without new loans or sign-ups.
“We’re also actively supporting and investing in our fintech partners — from Klarna to Affirm to Afterpay — that are fueling the adoption of installment capabilities globally,” Bowman said. “These fintech partners come to Visa to take advantage of our acceptance reach with sellers and the security and risk layers we can provide.”
Other BNPL Services
As mentioned, BNPL services have experienced exponential growth over the past few years. Affirm has been the leader in the space for some time, with the BNPL company launching a debit card earlier this year. However, the competition has become much fiercer, with major names like Shopify creating installment plans to gain market share. Earlier this month Splitit created an in-store BNPL service that works with existing credit cards.
Related Article: Goldman Sachs Rumored to Launch “Apple Pay Later”
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