One of the interesting member trends we see is the growing use of Buy Now, Pay Later (BNPL) services. This week, both Walmart Canada and Amazon Canada have made significant strides in offering more flexibility to their customers through BNPL services powered by Klarna and Affirm, respectively.
According to PYMNTS, Walmart Canada has introduced a new payment option that allows its customers to embrace the concept of "Buy Now, Pay Later" through a partnership with Klarna.
Laurent Duray, Chief eCommerce Officer at Walmart Canada, expressed their commitment to providing more payment choices and flexibility for customers. As we head into the holiday season, Walmart is prioritizing the customer experience by offering even more options when Canadians choose to shop with them.
This move by Walmart comes in response to the growing demand for BNPL among Canadian consumers. With preferences shifting towards flexible, better-value payment options, BNPL payments in Canada have seen a remarkable annual growth rate of 51.6%. It is expected to reach a whopping US $2.13 billion by the end of 2023.
Klarna's BNPL service enables Walmart Canada's customers to split their purchases into four flexible, interest-free payments over six weeks. This offering aligns perfectly with the evolving needs of shoppers who appreciate the convenience and budget-friendly approach that BNPL provides.
In the world of eCommerce giants, Amazon is never far behind when offering innovative payment solutions. In this case, Amazon has teamed up with Affirm to offer BNPL services through Amazon Business, marking Affirm's first foray into Business-to-Business (B2B) pay-over-time offerings for sole proprietors.
This move by Amazon Business is a significant step forward, aiming to make Amazon Business the best place for small businesses to fulfill their buying needs. When selecting Affirm as their payment option at the Amazon Business checkout and providing the necessary details, small business owners will receive a credit decision promptly. If approved, they can opt for pay-over-time installment plans ranging from three to 48 months, giving them greater control over their finances.
For example, a $200 purchase at 15% APR would cost a customer $34.81 for six months, totaling $208.84. This option can particularly appeal to small businesses looking for ways to manage their cash flow effectively.
While BNPL has a place in the market, it can also be where members can get into financial trouble. Here are three actions your credit union can do as we head into holiday shopping.
Review current members using BNPL
Create a micropayment option to your lending portfolio to help these members
Fold in all the financial education you offer to create new budgeting and financial behavior.
As the world of online shopping continues to evolve, your credit union can have the power to help your members manage their budgets effectively and enjoy a truly wonderful holiday season.
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