American Express uses Opy for its first third-party BNPL offering in the United States – TechCrunch
Credit card companies are looking to further penetrate the “buy now, pay later” (BNPL) market. American Express (Amex) today announced its intention to partner with Opy, the US subsidiary of Australian fintech Openpay, to allow all of its US cardholders to pay in installments for qualifying purchases in segments of health and automotive.
The partnership is American Express’s first BNPL deal in the United States, a company spokesperson told TechCrunch in an email. Amex will help integrate traders from these sectors on its platform.
Opy describes her solution as an improved version of the traditional BNPL model, which she calls “buy now, pay smarter”. Opy will lend up to $ 20,000 at one time to a client, charging them a flat fee and offering plans for up to 24 months, unlike the shorter term installments offered by companies like Affirm and Klarna.
American Express already offers its own BNPL options as part of its “Pay it Plan it” program launched in 2017 for purchases over $ 100, which also offers a fixed interest rate. The partnership with Opy will help Amex meet demand for options to fund large purchases over longer periods of time, Opy US CEO Brian Shniderman told TechCrunch.
“If it’s a big item – and this is where we specialize in – things that cost $ 1,000 to $ 20,000, 60 days isn’t really long enough to pay off something more expensive,” did he declare.
The company is able to offer lower rates, never higher than 9.99%, as it targets very specific industries that attract financially savvy clients, according to Shniderman. His average customer is 40 years old, while the average customers of many other BNPL providers are in their 20s, he added. Besides healthcare and automotive, Opy offers funding for home improvement and educational certification, although these two verticals are not ready to be included in the Amex partnership.
“[Our product is] predictable, transparent. If you look at the other purchase, now pay the companies later, they have deferred interest, there is return interest if you miss a payment. They recalculate all that interest to 0% like you have a really high interest rate for the life of the loan, ”said Shniderman, who worked closely with Amex in his previous role at Deloitte.
Amex’s main competitors have also recently made inroads into BNPL in an attempt to keep pace with payments companies like Stripe and Square. Mastercard launched its local Mastercard payout offering this fall, and Visa announced a brand partnership with Klarna soon after.