BNPL Isn’t Just Lending, It’s A Card Growth Engine

These outcomes are consistent with the benefits BNPL has brought to other sectors, such as eCommerce. Many consumers, particularly from Gen Z and Millennial demographics, say the availability of BNPL influences their purchasing decisions. Some even indicate they would not make certain purchases without it. Research shows that consumers tend to spend more and buy more frequently when BNPL is available, and that they are willing to switch to banks that offer the features they value.

For debit cards, which have not evolved significantly over time, BNPL represents a meaningful innovation. With BNPL, financial institutions gain increased usage, stronger positioning, and the opportunity to grow their card programs.

How Smart Debit Cards Support Primacy

Achieving “primacy”, or becoming a consumer’s primary financial institution, is a core strategic objective for most banks and credit unions. This goes beyond simply holding accounts. It involves earning consumer trust and becoming their preferred provider for financial products and services.

Today, that goal is increasingly difficult to reach. Competition now includes not only other financial institutions, but also retailers and fintechs that offer financial products.

For example, Walmart launched OnePay Later, and Costco partnered with Affirm. These moves are intended not only to facilitate transactions but also to influence long-term purchasing habits. Klarna’s stated goal is to “disrupt retail banking and become an everyday spending partner to the world’s consumers.” Affirm uses 0% interest promotions to acquire new users and retain them by offering Affirm issued debit cards. As of June 2025, Affirm reported over 2 million activated debit cards, drawn entirely from its existing customer base. Whoever owns the shopping and repayment process, owns the customer relationship.

These developments challenge the traditional role of financial institutions. However, offering in-house BNPL programs allows financial institutions to retain control of both the transaction and the repayment. By integrating BNPL into the checking account relationship, they keep customers within their ecosystem and strengthen loyalty and engagement.

BNPL Is a Necessary Strategy for Financial Institutions

At this stage, continuing to question whether BNPL is a short-term trend misses the broader industry shift.

BNPL has proven to be a powerful driver of customer acquisition, engagement, and primacy. Fintech companies have been expanding into this space with urgency and focus.

Financial institutions that implemented BNPL early are already seeing the benefits. These programs allow them to remain competitive, retain customers at the point of purchase, and grow interchange revenue in ways that fintechs will find difficult to replicate. According to J.D. Power, consumers feel significantly more satisfaction using BNPL from recognized traditional card issuers.

In practice, banks and credit unions that offer in-house BNPL programs find that their customers prefer them over third-party providers. equipifi reports that over 80% of BNPL users return to their financial institution’s program year over year, with a 34% increase in transaction volume compared to the previous year.

The Future of Credit and Payments

The future of credit and payments is shifting toward debit cards that are enhanced by BNPL functionality. These smart debit cards provide consumers with flexible, budget-friendly options, while helping financial institutions increase engagement and strengthen their position as the primary financial provider.