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Cash flow availability drives BNPL Use - Here is what credit unions can do to help!


A recent study performed by Visa revealed that consumers experiencing cash flow issues are much more likely to have used embedded lending such as By Now Pay Later (BNPL) in the last three months than those in more stable financial situations.

 As Credit unions face competition from "Buy Now, Pay Later" (BNPL) services embedded within other financial offerings, they can adopt several strategies to remain competitive and appealing to their members.

 

1. Develop or Partner for BNPL Solutions: Credit unions can either develop their own BNPL solutions or partner with existing providers to offer similar services. This could allow members to access flexible payment options directly through the credit union, ensuring they benefit from the same convenience offered by third-party BNPL services but with potentially lower interest rates and fees.

 

2. Enhance Digital Experience: Improving the digital interface and user experience is crucial. Credit unions should focus on streamlining online and mobile banking platforms to ensure they are user-friendly and competitive with the digital-first approach of many BNPL providers. This might include easier navigation, faster processing times, and enhanced security features.

 

3. Educational Campaigns on Financial Health: Providing educational resources that help members understand the impact of BNPL services on their financial health could be a strategic move. By informing members about the potential pitfalls of impulsively using BNPL services, such as increased debt and potential impacts on credit scores, credit unions can position themselves as a trusted advisor committed to their members' financial well-being.

 

4. Offer Competitive and Flexible Financing Options: Credit unions could explore more flexible lending solutions that cater to the needs of various consumers. For example, offering low-interest installment loans with flexible repayment terms might attract consumers who are looking for alternatives to BNPL services. Tailoring these offerings to match or exceed the flexibility of BNPL while maintaining responsible lending standards could help retain and attract members.


Credit unions were created to help members when they need it most. Helping members with their cash flow is just one simple way to stand out in the competitive financial landscape. Credit unions can effectively counter the growing influence of BNPL services and reinforce their role as member-focused financial institutions.

 

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