RBC Experiments with Buy Now, Pay Later Tool PayPlan

Need to Know

• RBC has partnered with Bread, a division of Alliance Data, to make PayPlan more readily available to merchants and consumers
• PayPlan, which RBC launched last fall, offers financing for 6-36 month terms, and interest rates as low as 0%.
• Bread is a payments platform that offers installment and BNPL options.
• BNPL has surged in popularity as both retailers (The Gap, Target) and payments providers (PayPal, American Express) look for new ways to reach consumers.

Analysis

RBC has partnered with Alliance Data’s Bread to roll out PayPlan, the buy now, pay later tool it launched in fall 2020.

PayPlan, which offers installment financing on large purchases, will be integrated into merchant’s checkout systems using Bread, which is a payments platform specializing in buy now, pay later and installment offerings.

“As Canadians increasingly shop online, we’re helping retailers provide greater convenience to consumers through this simple pay-over-time option,” RBC’s Amit Sadhu, vice president of personal lending, said in a statement. “Our alliance with Bread ensures PayPlan by RBC seamlessly integrates into a consumer’s existing online checkout experience as a secure and convenient e-commerce payment option. This is one of the ways we’re reimagining experiences to meet the evolving expectations of Canadians, and offering them more options to pay for larger purchases at competitive rates.”

Bread was acquired by loyalty services provider Alliance Data in December of last year. Its president, Derek Joyce, said the partnership with RBC is a step toward fulfilling the company’s “mission of offering more ways for people to pay globally.”

“We’re thrilled to work with RBC, the largest bank in Canada, to expand our reach and provide a robust digital payment solution at the point-of-sale, giving shoppers convenient payment options and more choices at checkout,” Joyce said. “We know that through this strategic alliance, we can help thousands of RBC’s merchant partners increase their e-commerce sales and profits.”

PayPlan integrates seamlessly with merchants’ e-commerce platforms and will be presented to customers when they check out as a payment option. Customers who complete the three-step approvals process for PayPlan are approved within seconds and can select from installment payment plans with terms of between 6-36 months, and interest as low as 0%. There are no hidden fees, and customers are not required to begin repayment until 30 days after their purchase.

Buy now, pay later technology has spiked in popularity throughout the COVID-19 pandemic, as customers look for more flexible payment options due to sudden financial insecurity. Leaders in the field include Klarna and Splitit, and a number of fintechs and traditional banks have launched their own BNPL tools within the past year, including PayPal, Citi, and American Express.

RBC, meanwhile, has launched a number of tools in recent months to better serve its customers in an increasingly contact-free banking ecosystem. These include the introduction of the Interac e-Transfer Bulk Request Money capability, and the launch of Aiden, an AI and machine learning tool that provides dynamic, real-time trading and market insights and results for RBC clients.