Dive Brief:

• Payments company Fiserv announced Wednesday it’s creating direct integrations of buy now-pay later options within its Clover and Carat operating systems for merchants, to simplify the way business owners connect to BNPL providers and remove the merchant’s need to build a new tech integration when they want to offer an installments option.
• Brookfield, Wisconsin-based Fiserv is partnering with buy now-pay later provider Affirm, which will be the first BNPL option fully integrated into Fiserv’s Carat operating system later this year. A Fiserv spokesperson would not provide a more specific time.
• The partnership means merchants using Carat, Fiserv’s omnichannel commerce system for larger companies, can easily add Affirm’s biweekly and monthly payment options to their checkout, according to an Affirm news release. Clover is Fiserv’s point-of-sale and business management system for small and medium-sized businesses.

Dive Insight:

Buy now-pay later – offering shoppers the ability to split payments for a purchase over a defined period of time – has become wildly popular in recent years. As the installments option has gained traction at large retailers and in verticals like travel and healthcare, it’s a payment option smaller merchants want to offer, too.

Fiserv already offers BNPL services to merchants through partnerships with Bread Financial (formerly Alliance Data), Synchrony and Zip, its release said. Affirm will be the first that’s fully integrated into Carat.

“Businesses want to meet consumer demand for buy now, pay later options, and we’re seeing increased interest from larger businesses that want to offer multiple BNPL options and from small and mid-size businesses that have not previously been able to offer these services,” Fiserv Senior Vice President Mark Hennin said in the release.

Between Carat and Clover, Fiserv serves 6 million merchant locations globally, a company spokesperson said. Executives expect this merchant segment of the company to become a $10 billion business by 2025.

The move announced Wednesday means merchants using the Clover and Carat systems will be able to implement BNPL providers for both e-commerce and brick-and-mortar sales in a more streamlined way, according to the release.

Amid a crowded BNPL field, San Francisco-based Affirm counts Target, Walmart and Amazon in its merchant network, and the company has partnered with Verifone and American Airlines. 

Affirm's tie-up with Fiserv means Carat merchants “will have the opportunity to reach new customers and drive increased sales,” said Affirm’s Chief Revenue Officer Geoff Kott, per the Affirm release.

Another payments company, Block, began offering Afterpay's BNPL option for its Square unit's online merchants in the U.S. and Australia after its $29 billion acquisition of Afterpay closed earlier this year. When Block purchased the Australian BNPL provider, part of the cross-sell plan was to integrate Afterpay into the Square business unit, allowing even small merchants to offer installment payment options at checkout.