22 THE NAFCU JOURNAL NOVEMBER–DECEMBER 2022 When first introduced, layaway programs offered through retailers were a popular way to purchase large ticket items and spread payments over time. The disadvantage was the requirement that the store hold the merchandise until the bill was fully paid. the 20% to 30% higher conversion from browsing to sales rate and have seen a 30% to 50% higher ticket sales.1 Fintechs have been leading the way in the BNPL adoption, and larger, traditional banking institutions are evaluating their own versions of the product, but what does this mean for credit unions? “At this point, it is uncommon to see credit unions offer a BNPL product,” said James Akin, Regulatory Affairs Counsel BNPL: THE OF INSTALL- MENT LOANS Resurgence Buy Now, Pay Later Reflects Demand for Installment Payments for NAFCU. “Some credit union service organizations are working on it, but it is primarily still in development.” In a NAFCU survey of members, no respondents indicated that they currently offer a BNPL product. When asked about plans to introduce a BNPL product: ■ 21% said they plan to introduce one in the next one to two years. ■ 15% said they considered introducing BNPL but decided not to do so. ■ 64% said they have not considered BNPL as an offering. The rapid increase in use of BNPL has caught the attention of the Consumer By Sheryl S. Jackson Buy Now, Pay Later (BNPL) has been described as the modern equivalent of layaway, but the consumer receives the item purchased immediately. Options to pay in installments rather than all at once are becoming more common, especially for items that cost more than $100. According to one report, BNPL payments made up 9% of online transactions in 2021 but are expected to account for about 24% of all global ecommerce transactions by 2026. Merchants benefit from
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