Canopy Servicing has formed a referral partnership with card issuing platform Marqeta to provide modern instalment and lending solutions with configurable buy now pay later (BNPL) options.

The alliance aims to target banks, credit unions and enterprise fintech companies.

It will be based on Canopy’s loan management and servicing offering and Marqeta’s card issuing infrastructure.

The collaboration is aimed at tapping the growing popularity of configurable instalment solutions like BNPL payments among borrowers who look for explicit repayment conditions.

As per a Juniper Research, BNPL payments are anticipated to comprise 24% of all tangible goods transaction by 2026 with a global value of $995bn.

Configurable BNPL solutions can be customised as per the requirements of borrowers, a feature which is available with conventional instalment products.

Canopy Servicing CEO Matt Bivons said: “The rapid growth of BNPL revealed consumer dissatisfaction with the traditional credit and lending products, as well as the constraints of legacy servicing infrastructure.

“Next-gen instalment, credit and lending products require the flexibility of modern loan management and servicing infrastructure and the scalability and control of modern card issuing.”

Furthermore, card issuers are increasingly providing the choice of transforming a credit card-based transaction into an instalment loan payment to the borrowers.

Such easy and line-item policies have helped the contemporary loan management and servicing platform to grow, said Canopy Servicing.

They also enable the consumers and businesses to reduce the cost of credit.

Marqeta vice president of global partnerships Jazz Samra said: “Configurable instalments will continue to make up a substantial portion of lending products in the future, as consumers increasingly seek out more flexible forms of payments.”

In December last year, Marqeta announced a partnership with Swedish BNPL player Klarna to expand its platform to 13 new European markets.