Amazon Gives Visa’s BNPL Offering A Huge Boost In Canada

Visa Installments, Visa Inc.’s buy now, pay later platform, received a huge lift Thursday with the announcement that Amazon.com will offer the payment option to Canadian consumers.

The payment option, which is being marketed in Canada as “Installments enabled by Visa,” has until now been available only through 100 Canadian brick-and-mortar merchants in Canada. Visa, jumped into the BNPL market four years ago

“Amazon is a critical player for us and will enable us to scale Installments enabled by Visa to another level because a merchant of Amazon’s status will create a lot of consumer awareness [about this payment option],” says Dan Iwachiw, head of product for Visa Canada.

BNPL loans, which are an established installment-payment option, are growing in popularity among Canadian consumers. Some 58% of Canadians are interested in paying by installments, according to Visa. Installments are expected to account for nearly one-quarter of all global e-commerce transactions by 2026, Visa says.

As part of Visa’s deal with Amazon, RBC and Scotiabank will market the payment option to their credit card holders. Visa is also in discussions with other Canadian banks to market it to their cardholders, Iwachiw says. CIBC and credit union Desjardins currently market Installments enabled by Visa to their credit card holders for in-store purchases.

Visa Installments allows consumers paying with their Visa card at the point-of-sale to select whether they want to pay for the purchase in installments or in full at the time of purchase. Cardholders opting for installments will receive the terms of the loan at the point of sale and again on their monthly credit card statement. Issuers and merchants work together to determine the repayment, Iwachiw adds. 

A key point of differentiation between Visa Installments and other BNPL payment options is that consumers with a Visa card from a card issuer that supports the program do not have to be qualified for the loan at the point of sale.

“Installments enabled by Visa is a feature of the consumer’s credit card,” says Iwachiw. “Cardholders don’t have to get a credit check, which removes friction from the process at the point-of-sale and which merchants like.”

Since Visa jumped into installment loans, Canada has become the most advanced market for the product, Iwachiw says. Other countries where it has been introduced include Australia, he adds.

“Canada is a lead market [for this payment option] and we are pursuing deals with other large Canadian merchants,” Iwachiw says. “This is a global, market-by-market initiative. Installments are growing in popularity and we don’t see it going away.”