Visa, the global card network giant, is collaborating with mega-processor Global Payments to allow Canadian merchants to offer buy now-pay later (BNPL) options to eligible card holders at the point of sale, according to a July 13 press release from the two companies. While Visa has offered the service directly to consumers in other countries, it has never before made it available through merchants at the point of sale.
Consumers will be able to “pay in smaller, regular amounts at the point of purchase” with their credit cards, the release said. Last year, Visa also piloted the installment payment options in the U.S.
Visa is pushing into the Canadian BNPL market as adoption of installment payments climbed by 30% in the last year. As part of Visa's tie-up with Global Payments, the credit union Desjardins will now be able to offer the BNPL option to eligible cardholders in Canada. Visa also plans to offer the payment option to customers of Scotiabank next month.
With the move in Canada, Visa is seeking to build services in response to a consumer craze for installment payment options. It's starting with Canada, where the trend has caught on more than in the U.S., in a bid to gain market share in that fast-growing Canadian BNPL arena, expanding its services there for merchants wanting to offer flexible payment options to their customers.
Installment payments represent a growing slice of the payment market at about $1.3 trillion of global payments volume, the press release said. In Canada, the BNPL payment opportunity is expected to be $50 billion annually, according to a Visa.
“Installment payments represent a significant segment of the payments ecosystem globally, and it is growing rapidly here in Canada,” Visa Canada Vice President Brian Weiner said in the press release. The new offering, called Visa Installments, allows merchants to offer a "better checkout experience,” said Weiner, who is also head of product and digital at Visa Canada, the Canadian operations of the San Francisco area company.
With the new service, Visa will provide consumers with the ability to split their invoices on their existing credit line “without submitting new loan applications, credit checks, or downloading a new app,” the release stated. Credit union federation Desjardins will enable its members to pay their invoices in “equal payments over a defined period of time at participating merchants,” it added.
For merchants, the installment payment option can help in increasing the “average purchase total and shopping cart conversion rate,” the release stated. Global Payments, which provides payment options, digital cards and loyalty programs, will enable merchants on its network to provide BNPL services to eligible card holders.
Rival card company Mastercard has also worked with “banks, fintechs and other players,” to help merchants deliver installment options to customers, according to a Mastercard report.