The news: Upgrade is taking the plunge into buy now, pay later (BNPL) with repayment periods spanning four to 36 months, per CNBC. The US neobank’s customers won’t accrue interest if they opt for four-month periods, and will have a fixed interest rate for all of the longer periods.
The neobank, founded by former LendingClub boss Renaud Laplanche, is taking a different approach to BNPL:
More on this: Upgrade aims to be ready for an IPO within the coming 18 months, Laplanche told CNBC—and the neobank’s BNPL entry follows an August funding round in which it was valued at $3.3 billion.
Trendspotting: Upgrade is the latest US banking player to announce or consider a BNPL expansion.
The opportunity: While BNPL is becoming an increasingly crowded field in the US, Upgrade may gain traction through its differentiated approach to installments.
By going with a bulk invoicing model, in the mold of credit cards, the neobank can woo consumers with a more convenient payment process. From there, it could sell new BNPL users its other banking offerings. Alternatively, BNPL could help boost engagement among Upgrade’s current users by giving them another reason to stay within the neobank’s ecosystem.