Synergent Blog

Selecting the Right Buy, Now Pay Later Platform

Feb 4, 2025 | Blog, Payments

Buy Now, Pay Later (BNPL) options continue to grow rapidly in popularity. But not all BNPL platforms are created equal. From fees to security features and so much more, learn about what types of features your credit union should look for before selecting a BNPL partner.

Consumers at large are increasingly turning to BNPL options to help with everyday purchases without incurring high-interest credit card or personal loan debt. According to Adobe, $18.2 billion was spent through BNPL during the 2024 holiday season (November 1 to December 31, 2024). This number is anticipated to grow. While it can be hard to know which trends are here to stay, BNPL is one that will.

“Buy Now, Pay Later services empower consumers with greater financial flexibility, allowing them to make purchases without immediate strain while providing credit unions with higher consumer loyalty which in turn protects interchange revenue,” said Rebekah Higgins, Vice President of Strategic Partnerships for Synergent. “BNPL can bridge the gap between affordability and accessibility, making shopping more seamless and inclusive.”

How It Works

BNPL programs enable debit cardholders to convert qualified transactions into installment plans and give credit unions a flexible spending option to offer members. Members first pay for a good or service using their debit card. Then, when members login to their digital banking app, they will be able to choose to split part of the bill to pay over time. Through the digital banking app, the member can choose their terms for repayment, which could be autopay installments or manual payments over a set period. The amount determined to be repaid at a later date is then deposited back into the members account for immediate use.

Meet Member Demand with Innovative, Secure Options

Data security is crucial when selecting a BNPL partner. equipifi, a leader in the BNPL space, exhibited their commitment to security by completing a SOC 2 Type 2 audit. This was conducted by leading compliance assessor A-LIGN, a technology-enabled security and compliance partner trusted by more than 2,500 global organizations to help mitigate cybersecurity risks.

In terms of innovation, BNPL solves three problems faced by financial institutions: engagement, income, and retention. According to equipifi, “these three pillars are also the most urgent problems financial institutions (particularly credit unions) are faced with. With the average age of credit union members at 52 years old and with 28% of members willing to leave their current financial institution for more “leading-edge digital banking experience”, it’s no wonder these concerns exist.” BNPL programs within a member’s credit union can help keep members within the digital environment at the credit union instead of leaving for a third-party BNPL platform.

Look for Low- to No-Interest BNPL Platforms

While some critics have blasted BNPL programs for giving consumers a way to spend more money than they can actually afford, they can be a less expensive, less predatory alternative to credit cards. While BNPL loans can incur late fees and interest, be sure to review the terms and conditions of any BNPL program you choose to partner with to ensure members are reaping the benefits of the offering. In a recent Payments Dive article, American Fintech Council CEO Phil Goldfeder discussed the growth of BNPL, it’s projected staying power, and why it appeals to consumers.

“When I’m about to make any purchase, I think through my best options. How can I make the most responsible choice for long-term stability of the financial ecosystem, but also for my own financial well-being? I’ll give you an example: my wife and I just purchased a new mattress. Could I pay for it in cash? Could I put it on my credit card? I found myself utilizing buy now, pay later. It was transparent, it was clear, and everything was disclosed up front,” wrote Goldfeder.

Educate Members About Benefits and Drawbacks of BNPL

Members who take advantage of BNPL gain benefits such as breaking up payments into smaller amounts over time that is, generally, paid off in a quick two to four payments. With payments made on time, often no interest or fees are charged, and no credit check is needed to use BNPL.

But, if payments are not made on time, late fees could be incurred and if the payments are not paid in full, a collection agency could get involved, impacting a member’s credit score. BNPL are treated just like a loan in terms of credit bureau reporting. Members should also watch to not overdraft accounts due to automatically scheduled payments for BNPL and be cautions to not overextend their finances.

Access equipifi Through Synergent

Credit unions who access the Jack Henry™ Symitar® core through Synergent are able to launch their own BNPL programs through their digital banking apps, helping members split their larger purchases into flexible installment loans.

Contact Us

To learn more about implementing equipifi at your credit union, please contact us today.