Credit union Buy Now, Pay Later (BNPL) is having a moment.
By 2026, hundreds of financial institutions serving millions of households nationwide are expected to offer BNPL. The banking industry is responding to the rapid rise in demand for this payment option, particularly from the 70% of U.S. consumers who would prefer to use BNPL from their trusted financial institution rather than fintechs like Klarna or Affirm.
It’s timely that financial institutions are entering the space: members have responded positively to this flexible financing solution from their credit unions. In the months following launch, credit union BNPL programs saw more member usage than all fintech BNPL providers combined. Equipifi’s aggregate data shows over 80% of members continue using their credit union’s BNPL into the second year, boosting usage by 34% compared to the previous year.
This level of consumer adoption is typically seen with innovative fintech products, not with traditional brick-and-mortar financial institutions. And yet, we’re seeing it happen with forward-thinking credit unions. Even more excitingly, the growth appears to be accelerating.
These BNPL products are all powered by a legacy piece of technology that is giving credit unions a competitive advantage over their fintech counterparts: Their banking core.
The core gives credit unions a 360-degree understanding of their members’ financial position and overall banking relationship. It provides real-time insights into each member’s budgeting needs. In other words, credit unions have all the data elements to determine a member’s true propensity to repay loan products.
It also allows them to design a best-in-class BNPL program.
The Advantage Of Your Banking Core Data
In today’s digital age, consumers make purchase decisions and engage with financial services differently. They expect everything at their fingertips, which makes accessibility, transparency, and flexibility essential features for any banking product looking to gain traction. A banking core-powered BNPL solution provides exactly that.
- Offers Powered By Banking Relationships: Unlike fintech BNPL providers, credit union BNPL can give members a clear understanding of their purchasing power whenever they need it. Members appreciate that the BNPL offers they receive are based on their individual financial circumstances and account for their ability to pay over time. That means no surprises and no accidental overextension.
- Removing Rejection From The Process: Compared to the fintech BNPL experience, which typically requires an application and approval process, credit union BNPL removes friction. Using cash flow and relationship data in the core, credit unions can underwrite members more efficiently, generating pre-approved BNPL offers. The result? No application. No wait time. No fear of rejection. And what’s more, members appreciate the convenience: they are only a few clicks away from completing the loan and seeing the funds deposited into their checking account.
- Always On And Accessible Now: The pandemic accelerated the growth of online shopping and with it a need-it-now mentality. Consumers are generally less patient, whether it is for a product that takes too long to be delivered or a service they have to wait to receive. BNPL gained popularity because it helps consumers purchase items that they might otherwise have had to wait and save for. A survey conducted by Michigan State University FCU ($8.2B, East Lansing, MI) found many members wouldn’t make certain purchases at all without access to BNPL. In fact, Gen Z and millennials prefer products like BNPL because it allows them to budget for the future without sacrificing their present quality of life. That makes credit union BNPL even more compelling. Because it is connected to the core, members can access offers at any time of day, accept loans in seconds, and receive funds instantly.
Credit unions are taking a popular payment format like BNPL and making it smarter, more intuitive, and frictionless.
Your Banking Experience On BNPL
Connecting your banking core with a high-engagement product like BNPL unlocks even more advantages.
Since the credit union originates these BNPL loans and tracks repayment within the core, they gain insights into their members’ repayment behavior. This is particularly valuable at a time when BNPL activity is largely absent from consumer credit profiles.
And because the core is at the center of a credit union’s standard products, the benefits of BNPL can be extended to other services with minimal friction. Here’s how:
- Smarter debit cards. A core-connected BNPL product enables all existing debit cards to offer splitting payments on eligible transactions. Credit unions who offer BNPL on the debit card have seen a 16 percent increase in debit card usage, boosting wallet share.
- Smarter checking accounts. BNPL adds flexible financing capabilities to checking accounts, allowing credit unions to better meet members where they are. Much like the holiday loans that give members more cash flow during high-expenses periods, checking accounts enabled with BNPL can play a similar role year-round, all without any manual intervention.
- Smarter banking experiences. Much of today’s BNPL activity takes place outside traditional financial institutions, leaving credit unions with limited visibility into repayment behavior. Credit unions can use their own BNPL products to start filling in that gap. Many are already using members’ credit union BNPL history to help them access more loan products, often at better rates.
Starting With Your Own Data
Financial institutions have a growing role to play in shaping the future of BNPL. And the banking core often contains the signals that can help determine when and how to begin.
In fact, most credit union BNPL started with one simple question: Are our members already using BNPL?
Then they looked at the data.
For example, Arizona Financial Credit Union ($3.6B, Phoenix, AZ) tracked fintech BNPL activity in its debit card data monthly. By the end of 2024, nearly $2 million was leaving the institution every month, and the volume has been growing 16% annually.
Educators Credit Union ($3.6B, Mount Pleasant, WI) asked the same question and discovered that 46,000 of its 150,000 members were already using BNPL elsewhere.
As member expectations evolve, many are looking to their primary financial institution for modern solutions. If they can’t find what they need, they will turn elsewhere
In 2025, Affirm announced that over 2 million consumers had activated its BNPL-enabled debit card. Klarna launched its own debit card in July 2025 and saw over 1 million cards activated in just 11 weeks.
As more consumers adopt fintech BNPL cards, the unique data advantage credit unions hold in their banking cores may diminish.
For now, however, there’s still a significant opportunity to use that core and the insights it holds to deliver meaningful, competitive financial experiences.
Lo Smith is a fintech executive with over a decade of experience helping financial institutions bridge the gap between traditional financial services and emerging fintech. As Head of Revenue at equipifi, she leads go-to-market strategy, driving success for banks and credit unions using tailored BNPL solutions that align with their strategic goals. She brings a deep understanding of stakeholder needs, operational execution, and long-term growth. Previously the Director of Financial Institutions at Array, Lo is passionate about enabling institutions to thrive in an evolving financial landscape. She can be reached at lo.smith@equipifi.com.
equipifi is the leading Buy Now, Pay Later (BNPL) platform built for financial institutions. Its white-label solution integrates with major banking cores, aligning BNPL offerings with consumers’ financial goals and banking preferences. equipifi enables institutions to boost engagement, grow market share, and deliver transparent, manageable installment options directly through their own apps. https://www.equipifi.com/bnpl-for-credit-unions