Credit cards are hot again! We're going full circle, and BNPL companies are now launching credit cards, embracing the medium they set out to disrupt.
PayPal is rolling out physical payment cards for eligible U.S. PayPal Credit users, allowing them to make in-store purchases wherever Mastercard is accepted with six-month deferred interest on travel and promotional financing terms on purchases over $149.
Klarna is piloting a card in the U.S. that spends like debit but can flip into pay later mode, extending its BNPL option from online to an in-store experience, with plans to extend its launch into Europe later this year. The company previously launched a credit card in the UK back in 2022.
Last but not least, Zilch is launching a physical card in the UK this September in partnership with Visa, which will allow users to earn rewards and access installment payments, just like they can online.
The moves follow rivals like Affirm, Afterpay, Upgrade, and Chime, which have offered various types of physical cards for several years.
In turn, traditional credit card issuers have been aggressively adding installment payment options to their offerings during the past few years, such as American Express' Plan It, Chase's My Chase Plan, Citi's Flex Pay, and Capital One's installment plans.
Basically the worlds of BNPL and traditional credit card lending are merging — as they should. BNPL has always been a feature, not a service, in my opinion. Now we just need to come up with proper regulation to protect consumers from this newly merged world, but I won't hold my breath…