Fintech Company Upgrade is Entering into Buy Now Pay Later Market with Short-term Installment Loans


U.S. fintech firm Upgrade is positioned to get into the continuously increasing and crowded buy now pay later market.

Upgrade was founded by Renaud Laplanche in 2016, is a digital banking firm that offers people payment cards as well as personal lines of credit.

Unlike a credit card, Upgrade takes all the purchases people make in a month and makes an installment plan for them to pay down their all debt. The payment plans are generally long-term, ranging from 6 to 36 months, and charge a fixed interest rate.

Upgrade is now planning to launch a buy now and pay later-style product that allows users to pay off their debt in 4 months, without charging any interest. Laplanche told that the firm expects to start the new service in the coming months.

Upgrade’s CEO Laplanche said, “We are working on a version of the Upgrade Card that’s better suited for smaller expenses. In that case, we don’t need to charge interest because it’s a smaller amount.”

Buy Now Pay Later (BNPL) is set to increase in importance to become a $100 billion industry courtesy of the coronavirus pandemic that accelerated online shopping.

BNPL services allow shoppers to spread the price of their purchases across three or four months, rather than charging consumers all at a time. BNPL firms make their money by accepting a small fee at a time from merchants on each transaction.

Instead of adding a checkout option on websites of merchants, Upgrade gives invoice consumers information of what payment they owe over the next four-month period.

Laplanche said, “What we like about embedding the product into a card is the broader acceptance. BNPL often relies on partnerships with merchants. It’s starting to get mainstream online, but not so much in-store.”

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