Digital banking startup FinTech Upgrade is jumping into the buy now, pay later (BNPL) space with a product that allows users to pay off their outstanding debt in four months without interest, according to a CNBC report Friday, October 1.
Upgrade creates installment plans to allow users to pay off their debt over a period of six to 36 months with a fixed interest rate. The company plans to roll out the BNPL initiative in the coming months, Upgrade CEO Renaud Laplanche told CNBC.
“We are working on a version of the upgrade card that is more suitable for small expenses,” the CEO said. “In this case, we don’t need to charge interest because it’s a lower amount.”
Upgrade’s product will be different from other BNPL offerings as it provides a payment option on merchant websites to allow Upgrade to consolidate a user’s card purchases into one lump sum and charge them what he owes over four months.
“What we love about integrating the product into a card is the wider acceptance,” Laplanche told CNBC. “BPL often relies on partnerships with merchants. It’s starting to catch on online, but not so much in-store. »
The upgrade hit a $3.3 billion valuation in August after a $105 million Series E funding round, but Laplanche told the outlet it will be some time before the company becomes public, although he wants it to be ready for its IPO within 18 months.
The company has paid $7 billion in credit since its inception in 2017 and could match that amount this year.
Related: Upgrade Worth $3.325 Billion After Series E Funding Round
Upgrade launched a rewards checking account earlier this year that offers customers 2% cash back and launched the Bitcoin Upgrade rewards card in July that allows users to be paid in Bitcoin or cash.
Upgrade also announced its move to mobile banking in January with a debit rewards product that offers customers cash back when they use available funds to cover day-to-day expenses.