Capital One Financial is reportedly preparing to pilot a ‘Buy Now, Pay Later’ (BNPL) product this year, as the market for BNPL services continues to evolve rapidly.
As part of its BNPL entry, the firm is planning to test point-of-sale loans for customers at its existing merchant partners, Reuters reported.
Go deeper with GlobalData
Capital One CEO Richard Fairbank has been quoted by the news agency as saying at a Barclays investor conference: “We will be testing a beta version of our own BNPL product.”
Fairbank added that the company will now use the data from the test to understand the offering better and to analyse how to garner the attention of both merchants and consumers.
“We’re watching this product closely and certainly not taking this growth lightly,” he added.
Fairbank attributes the sudden popularity of the BNPL offerings to support from venture capitalists as well as subsidised interest costs by merchants.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFairbank further said: “The elephant in the room is the sustainability of the merchant subsidy. This is fuelled by merchants’ beliefs that they’re getting incremental volume.”
The US-based credit card issuer’s latest move comes at a time when the consumer loans segment is facing increasing competition from tech firms, which enables merchants to offer cheap financing options for purchases.
Last year, Reuters reported that Capital One decided to stop its customers from using their credit cards to clear BNPL instalment dues citing risk concerns.
At the time, a spokeswoman for the firm said that the decision does not impact customers who used debit cards or checking accounts for BNPL purchases.
