Aravind Ajith’s Post

The US Consumer Financial Protection Bureau determined that BNPL providers need to follow same regulations as Credit Card providers. Learn more in this week’s blog post. . . . . . #bnpl #buynowpaylater #cfpb #us #regulation #creditcard #merchant #merchantservices #business #consumer #alto #altopay

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

In case you missed it, U.S. consumers have entered you into a race. Did you know that: 🤺 70% of BNPL users would prefer the service from their financial institution (Source: PYMNTS) 🤺 71% of BNPL users would be interested in other financial services through their BNPL provider (Source: Marqeta) Consumers want purchase, payment, and banking capabilities from ONE place. So the question is, who will win the consumer wallet and the financial relationship? Will it be #BNPL providers who expands their offerings? Or will it be financial institutions that unlocks BNPL for its account holders? We know who we're rooting for. (Hint: It's you!) #buynowpaylater #affirm #creditunions #creditunion #payments #banking

According to the 2023 PYMNTS Intelligence report “The Credit Accessibility Series: BNPL’s Wide-Ranging Impact on Consumers and Merchants”, BNPL is more preferred for its effective cash flow management than for being no-interest for shoppers.   👉 53,3% of respondents consider that feature as the most important reason for choosing BNPL, while only 11,2% mention the low or no interest rate.   This witness the tendency to leverage BNPL as a valid opportunity to effectively manage own expenses budget.   In addition, it is also the evidence that shoppers are more focused on convenience than on affordability. #BNPL #lending #payments #fintech #creditcards

It's not frosting. It's part of the cake. 🍰 If you think of Buy Now, Pay Later as a vanity investment, it's time to look at your data and think again. Here’s what we know from launching BNPL with dozens of financial institutions: ⚡Your cardholders are using 3rd-party #BNPL: 3 out of 5 consumers have used BNPL in the last year, and 79% are highly satisfied 💯 They're paying for BNPL with their debit cards: 89% of 3rd-party BNPL repayments are made on the debit card 🔆 They're getting offers for BNPL debit cards: Over 700K consumers today have an #Affirm debit card. Banks such as #Chase have also introduced BNPL for their debit cards. How does BNPL look for your FI? Let's find out: https://lnkd.in/ePC7f6Zx #Buynowpaylater #creditunion #digitalbanking #payments Jessica Hernandez Generations Federal Credit Union PYMNTS

The Consumer Financial Protection Bureau's recent rule on the Buy Now, Pay Later (BNPL) industry has left credit bureaus and BNPL players at a standstill. 💳 Despite readiness from credit bureaus, BNPL firms are hesitant to share short-term loan data. Leslie Bender, a senior counsel at Eversheds Sutherland shed some light on the challenges faced by the industry while BNPL firms like Affirm and Klarna offer insights on reporting practices in the article below! ⬇️ 👀 https://hubs.ly/Q02G-f070 #CFPB #BNPL #CreditBureaus #PaymentsIndustry

🛍️ BNPL Are Credit Cards?!    Right after CFPB’s funding question was cleared by the Supreme Court, the regulator served BNPL with an interpretive rule. “Buy Now, Pay Later lenders are credit card providers”. Wait. What? How can BNPL be the same as credit cards? Haven’t BNPL players always positioned themselves as the new and better alternatives to credit cards? The above statement is true. However, in CFPB’s eyes, there is no difference between these two products. “Like conventional credit cards, Buy Now, Pay Later combines payment processing and credit services, while charging transaction fees to merchants.” Hence the regulator calls out BNPL’s duties under the Truth in Lending Act: 📍 Investigate disputes 📍 Provide billing statements 📍 Refund returned products or canceled services It is a clever move for the regulator to leverage existing regulation. After all, if a regulation is designed well, it should cover existing and new lending products. Meanwhile, the identity you are fighting hard over the years to break away from, in others’ eyes, is an integral part of - you. Such is consumer credit. Such is life. #consumercredit #riskmanagement #newlending #bnpl #creditcard

With Buy Now, Pay Later (BNPL) gaining immense popularity, the recent ruling by the CFPB is a significant win for consumers. BNPL lenders are now classified as credit card providers, ensuring key protections such as the right to dispute charges, request refunds, and receive billing statements. This marks a positive stride towards a fairer BNPL market. According to recent data, approximately 57% of BNPL users fall within the 18-35 age bracket, many of whom are new to credit. It would be beneficial if BNPL lenders reported to credit bureaus, aiding young consumers in building credit history and providing lenders with a more comprehensive view for future credit evaluations. Read more about the CFPB ruling at CNBC: https://lnkd.in/eyKjiUbK #BNPL #ConsumerFinance #CreditBuilding #Fintech

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

📢 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