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New CFPB Rule Extends Credit Card Protections to Buy Now, Pay Later Loans The Consumer Financial Protection Bureau (CFPB) has issued a new rule ensuring that “buy now, pay later” (BNPL) loans will soon offer the same protections as credit card users. This revised guidance mandates that BNPL providers, such as Affirm and Klarna, must issue prompt refunds on returns, provide comprehensive billing statements, and allow repayment pauses amid charge disputes. While major BNPL lenders largely support the ruling, they emphasize that BNPL plans and credit cards are distinct products that require different protections. This change, set to take effect in two months under the Truth in Lending Act, will not alter how BNPL companies report to credit bureaus. #ConsumerProtection #BNPL #CFPB #Finance #Affirm #Klarna #FinancialRegulation

The Consumer Financial Protection Bureau (CFPB) today (May 22) issued an interpretive rule that confirms that Buy Now Pay Later (BNPL) lenders are credit card providers! BNPL lenders such as Klarna, Afterpay and Affirm should be treated in some ways like credit card providers, according to one US financial regulator - CFPB. Like credit card providers, BNPL firms must investigate disputes, refund returned products or voided services, and provide billing statements. Latest interpretation brings Buy Now, Pay Later (BNPL) companies closer to the regulatory framework of credit card providers, although BNPL firms are not required to assess consumers' ability to repay short-term installment loans. For some time, BNPL providers have anticipated greater regulation. The global BNPL market is projected to grow from $37.19 billion in 2024 to $167.58 billion by 2032, as per the recent report. This move marks a significant step in integrating BNPL firms into the existing regulatory landscape, ensuring fair competition and consumer protection. #creditcards #BNPL #ConsumerProtection #Credit #Klarna #Regulations #Fintech

📢 Chase to Decline Credit Card Payments for Third-Party BNPL Plans Starting October 10, 2024, Chase will no longer allow its credit cards to be used for third-party BNPL plans, promoting its own Chase Pay Over Time offering. With roughly 83 million cardholders, this shift could significantly impact the BNPL market, pushing consumers to seek alternative payment methods or switch to Chase's installment plans. This move might challenge the market share of other BNPL providers and subprime lenders. What do you think this means for the future of third-party BNPL services? How might other providers respond to this change? Link in first comment #BNPL #FinTech #SubprimeLending #ConsumerFinance #PaymentsIndustry Uown Leasing

Chase Halts Credit Card Payments for BNPL Installments: A Critical Move In a significant policy shift, JPMorgan Chase has barred its customers from using credit cards to make Buy Now, Pay Later (BNPL) installment payments. This decision impacts widely-used BNPL services like Klarna, Afterpay, and Affirm. Chase’s new policy highlights mounting concerns over the financial risks associated with BNPL schemes, which often encourage consumers to take on multiple loans in addition to their existing credit card debt. 🔗 Read More: https://lnkd.in/eA5WisUg #fintech #BNPL #creditcard #money #payment

Chase customers will soon be prohibited from using their credit cards to pay for third-party BNPL instalment plans. The US bank informed credit cardholders on their latest statements, that effective October 10, 2024 this will goes into place. Payments to these instalment plans (e.g., Klarna, AfterPay, etc.) using a Chase credit card will from then on be declined. The bank offers its own BNPL feature, Chase Pay Over Time, which lets users break up credit card purchases into instalments. More evidence on the profitability of the BNPL system for providers. (Image by US News) #Fintech #BNPL #CreditCards #Chase #DigitalPayments #Finance

Banks Gunning for BNPL (Buy Now Pay Later) JPMorgan Chase and Citibank are now competing with established buy-now, pay-later (BNPL) providers like Klarna and Affirm. BNPL allows shoppers to pay over time, often interest-free. However, tougher regulations, effective since July 30, require BNPL companies to address consumer disputes and provide clearer terms. In 2022, $60 billion in BNPL loans were issued in the US. Yet, rising interest rates mean BNPL providers are now offering longer payment plans with higher costs. Meanwhile, banks are developing products that integrate BNPL-like features into existing credit cards. Get info how you can make extra income online: https://lnkd.in/e__fiSjS

Credit cards will no longer be able to fund Afterpay Klarna Zip Co accounts "Effective October 10, 2024, you will not be able to use Chase credit cards to pay for third-party Buy Now Pay Later (“BNPL”) instalment plans. Payments to these instalment plans (e.g., Klarna, AfterPay, etc.) using your Chase credit card will be declined. Expect other issuers to follow. Chase has a 20% market share of cards "If your Chase credit card is used for any of these recurring BNPL plans, please update the payment method with your BNPL provider to avoid any missed payments or late fees (if applicable)." I expect that the other US issuers will follow suit. 🇺🇸JPMorganChase 24% 🇺🇸Capital One 14% 🇺🇸Citi 15% 🇺🇸Bank of America 13% 66% of credit cards issuers by 4 Banks. #payments #bnpl #buynowpaylater

The Consumer Financial Protection Bureau recently stipulated that BNPL providers are credit cards, enabling consumers to dispute charges and claim refunds directly to the BNPL provider. This is going to have serious ramifications for the infinite number of embedded BNPL providers. I don’t have statistics on disputes and refunds for BNPL vs. credit card, but credit cards are around 0.50%. BNPL providers will need to build out teams to manage disputes and refunds, which will further impact the margin profile of these companies. Lending is already a challenging game and this will further impact unit economics. 🤔

Affirm says CFPB’s proposed BNPL rules will confuse customers "...While Affirm supports the adoption of consistent BNPL regulation by the Bureau, Affirm asserts consumers and the BNPL industry would be better served by BNPL-specific regulations designed for how consumers use BNPL products,” the company’s letter reads. “Requiring BNPL providers to comply with rules designed for open-end credit cards creates compliance challenges and confusing outcomes for consumers...” #bnpl #regulation #comments #installment #creditcards #confusion Payments Dive Consumer Financial Protection Bureau Rohit Chopra Klarna Zip Co Afterpay Sezzle _________________________________ If you want to immediately see new content that I curate 👉🏻 Ring my bell (🔔) and follow #informationbanker or Informationbanker and if you want to get the posts that got noticed in my weekly What’d I miss newsletter, subscribe here: "https://lnkd.in/d5_KvWwu"

Why are financial institutions offering Buy Now, Pay Later as a part of their digital banking experience? Because their cardholders want to use it. Here's what we know from our #BNPL launches: ⚡ Uptake happens fast: Nearly all FIs that launch BNPL with equipifi see loan activity on Day 1 of going live 💯 The solution is intuitive: Your cardholders understand BNPL. When they know they have offers in their online banking, they engage 🔆 They're gonna love it: Most cardholders take out multiple loans, and first time users come back again and again Want results like this for yourself? Let's chat!: https://lnkd.in/ePC7f6Zx #Buynowpaylater #creditunion #digitalbanking #payments #lumin #symitar Associated Credit Union of Texas (ACU of Texas) Eilene Markus