Debit card BNPL vs. credit card BNPL: Key considerations for bank and card issuers

In modern banking, the adoption of Buy Now Pay Later (BNPL) services has become increasingly prevalent, offering consumers flexible and transparent payment options. BNPL allows cardholders to extend their budget without the stress of immediate payments, providing financial flexibility without the need for a separate application. For financial institutions seeking to enhance their card offerings, boost customer loyalty, and increase revenue growth, the decision to integrate BNPL functionality onto cards is given.

However, choosing whether to launch BNPL on debit or credit cards requires some consideration. Here, we examine the key factors banks and card issuers should weigh when evaluating debit card BNPL versus credit card BNPL.

Benefits with debit card BNPL

With debit card BNPL, consumers can enjoy immediate purchasing satisfaction without financial strain. It allows consumers to conveniently split completed transactions into numerous instalments in their bank app. For a bank or card issuer, it enjoys the following benefits:

  • Increase of revenue: Providing BNPL services to debit cardholders creates a chance to enhance revenue by transitioning non-credit customers into credit ones, thereby introducing new income streams through fees and interest rates.
  • Customer accessibility: Integrating BNPL services with debit cards significantly broadens financial accessibility, catering to a diverse and wider customer base, including individuals with limited or no credit history. This inclusivity enables those relying on debit cards for everyday transactions to access more flexible payment options, allowing banks to engage with and support a previously underserved market segment.
  • Enhanced customer engagement: By offering BNPL on debit cards, banks can deepen their relationship with customers, providing added convenience and flexibility in payment options. This can contribute to higher customer satisfaction and retention rates, as consumers appreciate the ability to manage their finances more effectively.
  • Brand loyalty and differentiation: By offering BNPL on debit cards, banks can strengthen brand loyalty and differentiate themselves from competitors. The provision of innovative payment solutions aligns with evolving consumer preferences, positioning banks as forward-thinking institutions committed to meeting.
  • Strengthen deposit relationships: A difference between debit card BNPL and credit card BNPL is the possibility of harvesting stronger deposit relationships. By integrating the payment method on debit cards, banks can support a broader range of customers and prevent significant portions of transactions from moving away from deposit accounts to BNPL providers.

Benefits with credit card BNPL

Credit card BNPL provides a modern, flexible payment option, allowing consumers to make purchases with their credit card and pay for them in instalments over time. This approach caters to a new generation of consumers who favor transparent and convenient digital credit products over traditional methods.

For a bank or card issuer, it possesses the following benefits:

  • Revenue generation: Credit card BNPL presents revenue opportunities for banks through interest rates and fees associated with extended payment plans. By encouraging customers to carry balances, banks can generate additional income streams while providing attractive and valuable financing options to cardholders.
  • Upselling and cross-selling: Credit card BNPL offers banks opportunities to upsell and cross-sell other financial products and services. By engaging customers through BNPL services, banks can deepen relationships and promote the adoption of premium card offerings, insurance products, and investment accounts.
  • Competitive edge: In a competitive market, offering BNPL on credit cards enhances banks’ competitive positioning and attracts high-spending consumers. The inclusion of value-added benefits such as rewards programs, where customers can collect points on purchases made through BNPL, and purchase protections further differentiates card offerings, driving customer acquisition and retention.

Embedding BNPL on credit or debit cards?

Both debit card BNPL and credit card BNPL provide convenient and modern alternatives to traditional credit products, offering flexibility and transparency to consumers. However, it’s important to remember that debit cards are consumers’ primary payment method. According to Forbes, 53% of Americans use a physical or virtual debit card, while 37% prefer credit cards. Similarly, for BNPL (Buy Now, Pay Later), 77% of users make installment repayments with debit cards, compared to only 10% who use credit cards.

From a card issuing financial institution’s perspective, offering BNPL on either debit or credit cards represents an opportunity to boost revenue with BNPL fees for arrangement, administration, and interest. Implementing such a method across all payment products thus holds significant value and is highly recommended. Besides, offering BNPL options on debit and credit cards dramatically increases customer loyalty – it’s a win-win situation for both consumers banks, and card issuers.

If you’re still contemplating whether to launch BNPL on your debit or credit cards, consider the following aspects:


  • Customer base and demographics: Which card type aligns better with your target customer demographics for BNPL services?
  • Deposit growth: Are you looking to cultivate your deposit relationships?
  • Revenue generation: What revenue opportunities are associated with BNPL services on each card type, and which aligns better with your revenue goals?
  • Customer experience: How will offering BNPL on debit or credit cards impact the overall customer experience and satisfaction?
  • Technology and infrastructure: Do you have the necessary technology and infrastructure for BNPL services on both card types, and are there additional requirements for one over the other?

Conclusion: Embracing BNPL Services for Debit and Credit Cards

In conclusion, offering BNPL services on debit and credit cards offers significant opportunities for banks and card issuers. Debit card BNPL enhances financial inclusivity and customer loyalty by providing accessible and modern credit-like benefits to a broader customer segment. For credit cards, BNPL improves cash flow management for consumers and allows banks and card issuers to offer advanced payment solutions that meet the needs of today’s savvy shoppers.

Implementing BNPL not only aligns with evolving consumer preferences but also boosts competitive advantage, driving customer satisfaction and revenue growth. As consumer payment behaviors evolve, embracing BNPL is essential for staying relevant and competitive in the financial sector.

Notably, with BNPL solutions like Sileon’s, banks and card issuers can seamlessly launch both credit and debit card-linked BNPL options, catering to diverse customer preferences and maximizing the potential for fostering enduring relationships with their cardholders.