This month, Associated Credit Union of Texas launched Buy Now, Pay Later (BNPL) on its digital banking app to give members the ability to split larger debit card purchases into installment plans, payable over time. Clay Franks (President of ACU of Texas) and Bryce Deeney (CEO of equipifi) joined host Mike Lawson on CUBroadcast to talk about their partnership and the value it brings to the institution and its members.
BNPL grew 25 percent in transaction value last year and is projected to surpass $100 billion by 2024. According to the Consumer Financial Protection Bureau, 89 percent of all repayments in 2020-2021 were made using a debit card.
Offering BNPL keeps engagement within the credit union’s ecosystem
BNPL adoption is growing for US consumers across age demographics. When asked why ACU of Texas chose to implement a technology like equipifi’s BNPL, Clay notes that it was an unexpected item that “wasn’t on our roadmap.” However, upon running the numbers and seeing that ACU of Texas’ members were “utilizing very similar services elsewhere,” Clay circled back with Bryce and his team. Mike remarks that giving members the ability to split purchases into installment plans would “keep [these transactions within] that credit union’s ecosystem.”
Bryce adds that “all other BNPL today is typically trying to capture the member to use their service instead of the credit unions’.” Now, members have the option of paying over time via BNPL offers available on the same debit card offered by their credit union.
“We're making it a credit union product,” Clay agrees. “[If members are] using it elsewhere, we might as well keep it in-house and offer a fairer product for them and make them a stickier member for us. I think it's going to be well-received by the membership.”
Primary financial institutions meet members where they are
As a credit union that has issued a lot of debit cards, ACU of Texas sees BNPL as a differentiator that will help it become the primary financial institution for its members. This product aligns with members’ existing purchasing and payment behaviors and leads to an enhanced member experience.
Members will continue to use their debit cards and banking app the same way, Bryce explains, “except now they can see all of their eligible purchases that they made on their debit card in near real time.” There, they can decide to accept a plan, see all their available offers, and equipifi writes these as loans back into the banking core system. Clay adds that equipifi is “fully integrated with Symitar and our digital banking partner”
“It's a sticky product for sure,” Mike remarks to Clay. “[ACU of Texas] is a trusted resource for your members. Having this at your [credit union…] gives you guys more value.”
Clay agrees and reemphasizes that the goal of launching BNPL is all about ACU of Texas’ members. “If we can give them a better product than they're receiving on the market elsewhere -- a fairer product -- then that's what we're going to do every time.”
Splitting payments is a major differentiator for debit cards
“I want to give Clay and his team a shout out,” Bryce says. “ACU of Texas is the first financial institution in [their state] to launch debit card BNPL for consumers who call them home for banking.” When 70 percent of BNPL users in the USwant this solution from their financial institution and with the rapid member-driven changes in the industry, the ability to split payments is a differentiator today and table stakes tomorrow. “2023 is going to be the year for credit union led BNPL,” Bryce predicts. “I feel like this is a huge win for ACU of Texas.”
Mike agrees. “I think your members are going to be very, very happy with what you guys are offering.”
This is a recap of ACU of Texas and equipifi’s episode on CU Broadcast. Click here to listen to the full podcast.