Upgrade adds short term loans through BNPL
FinTech digital banking startup Upgrade is jumping into the Buy Now, Pay Later (BNPL) space with a product that enables users to pay off their outstanding debts in four months without interest, according to a CNBC report on Friday (Oct.1) .
Upgrade creates installment plans that allow users to pay off their debts at a fixed rate over six to 36 months. The company expects 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 better suited for smaller expenses,” said the CEO. “In this case, we don’t have to charge any interest as it is a smaller amount.”
Upgrade’s product differs from other BNPL offerings in that it offers a checkout option on merchants’ websites, which allows Upgrade to combine a user’s card purchases into a lump sum and charge them for the amount they have over owes four months.
“What we like about embedding the product in a card is the wider adoption,” Laplanche told CNBC. “BNPL often relies on partnerships with dealers. It’s starting to get mainstream online, but not that much in business. “
Upgrade hit a valuation of $ 3.3 billion in August after a $ 105 million Series E financing round, but Laplanche told the news agency it will take the company a while to go public, despite it wants it to be ready to go public within 18 months.
The company has paid out a $ 7 billion loan since its inception in 2017 and could reach that amount this year.
Related: $ 3.325 billion upgrade following the Series E fundraising round
Upgrade introduced a rewards checking account earlier this year that offers customers 2 percent cashback and in July launched the Upgrade Bitcoin Rewards Card, which allows users to pay with Bitcoin or cash.
Upgrade also announced in January the move to mobile banking with a debit rewards product that returns cash to customers when they use existing funds to cover daily expenses.