Citi co-opts BNPL strategy with new card in Australia
The news: Citi will launch a buy now, pay later (BNPL) card dubbed Spot in Australia through a partnership with Diners Club, by PYMNTES.
How it works: Card can be used online or in-store anywhere MasterCard is accepted and allows customers to pay for their purchases in four bi-monthly interest-free installments. For purchases over $ 200, customers can split the refund into eight installments for a lump sum of $ 10. Unlike Citi’s existing lending solution, Flexible payment, Spot bears no interest. Flex Pay can also only be used for Amazon purchases or applied to past transactions.
Why it’s worth watching: BNPL products engulfed the volume of payments during the pandemic and recent decisions by big name companies suggest that activity will not slow down anytime soon.
- Wholesale trade do Sezzle his favorite BNPL partner this week, bringing the solution to his more … than 60,000 merchants. And Apple in partnership with To affirm so that Canadian customers can pay for Apple products through BNPL provider.
- Credit card issuers suffer the most, as demand for BNPL offers from incumbent players like Klarna and After payment is growing, which may have influenced Citi’s decision to expand further into the BNPL space.
Why this might be successful: Unlike many BNPL providers, Citi does not have to worry about forming retail partnerships as its card can be accepted at most points of sale.
This makes Citi a formidable player in the BNPL space, especially in Australia, where BNPL services are extremely popular: 48% of Australian internet users said they had used a BNPL service in the past 12 months, by a Léger poll from April 2021.
Customers may be more inclined to use the Spot Card than other BNPL offers. Card-based solutions are easy to use and offer a more streamlined payment process compared to many legacy BNPL providers, which include approval processes and may require the use of third-party mobile apps for in-store purchases .
And after? Citi will likely offer the Spot card in other markets if it is well received in Australia, and the latest version of BNPL solutions could turn the global installment loan landscape upside down. Issuers who are not already involved in the BNPL space, such as A capital letter, who has a tense story with BNPL services – could follow Citi’s lead with their own BNPL card launches.