Velera is extending its buy now, pay later (BNPL) offerings within the credit union industry by launching two new installment payment solutions. With this initiative, Velera aims to provide flexible financial options that cater to evolving consumer spending habits. By enriching their service lineup, Velera is paving the way for credit unions to maintain competitiveness in the financial sphere. Credit unions are increasingly being pushed to integrate into consumer routines, driven by the rapid expansion of the BNPL market.
In earlier reports, credit union members have expressed growing interest in utilizing BNPL but often seek solutions outside their banking providers. This trend contrasts with the current strategy to bring competitive and easy-to-use installment solutions directly through familiar financial institutions. Velera’s approach may signify a shift in how credit unions will be perceived in relation to third-party services, which have previously dominated the space with companies like PayPal (NASDAQ:PYPL), Affirm, and Klarna.
What’s New with Velera’s Offerings?
The two new services introduced by Velera are Debit Flex Payments and Apple (NASDAQ:AAPL) Pay’s Pay with Installments. Debit Flex Payments, available through Velera credit unions and powered by equipifi, allows debit card users to take advantage of real-time, personalized installment plans. Meanwhile, the Apple Pay feature, set to launch later in the year, creates an opportunity for members to break down credit card expenses into manageable parts, enhancing the usability of existing credit cards.
How Could This Impact Credit Unions?
These offerings could bolster the appeal of credit unions by merging traditional banking with modern payment trends. By facilitating simple, secure, and flexible payment methods, financial institutions can deepen member engagement. Velera sees this move as a response to consumer demand, with the BNPL sector expected to reach $3.7 trillion by 2030.
Cody Banks, Velera’s senior vice president for product experience and enablement, emphasized the importance of these initiatives.
“BNPL has become an increasingly important part of how consumers manage everyday spending,”
he noted, stressing the need for enhanced convenience and choice in financial products.
A PYMNTS Intelligence report has highlighted the growth in installment payments among top BNPL providers, reflecting a 22% increase in value and a 12% rise in transactions over the last year. Such data underscores the significant ongoing shift in consumer spending habits, where installment options transition from large discretionary purchases to everyday expenses like travel and home services.
Despite the rising popularity, many members remain unaware of BNPL options available through their credit unions. As a result, they frequently turn to third-party solutions. A report associated with Velera points out this gap in awareness, with consumers still relying heavily on external BNPL tools found through merchant checkouts.
“In many cases, members may not even realize that their CUs could offer installment options,”
the report noted.
As credit unions navigate the purchase landscape, the integration of BNPL options may redefine their role in consumer finance, encouraging members to take advantage of in-house solutions. By better promoting their offerings, credit unions can potentially reclaim members who have turned to external sources, thus strengthening their market position.
