American Express Partners with Opy for BNPL Offering

Credit Card Companies Expand into Buy Now, Pay Later

Credit card issuers are increasingly focused on expanding their presence within the buy now, pay later (BNPL) sector. American Express (Amex) recently revealed plans to collaborate with Opy, the U.S. division of Australian fintech firm Openpay.

This collaboration will enable American Express cardholders across the U.S. to utilize installment payments for eligible purchases within the healthcare and automotive industries.

First Third-Party BNPL Agreement for American Express

According to a company spokesperson communicating with TechCrunch via email, this partnership represents American Express’s inaugural third-party BNPL arrangement in the United States. Amex will facilitate the integration of merchants in these targeted sectors onto its platform.

Opy’s “Buy Now, Pay Smarter” Approach

Opy positions its solution as a refined iteration of the conventional BNPL model, branding it as “buy now, pay smarter.” Unlike competitors such as Affirm and Klarna, Opy provides customers with access to credit up to $20,000.

This funding is accompanied by a fixed fee and repayment plans extending up to 24 months.

Complementing Existing Amex BNPL Options

American Express currently provides its own BNPL functionality through the “Pay it Plan it” program, which was introduced in 2017. This program caters to purchases exceeding $100 and also features a fixed interest rate.

Brian Shniderman, CEO of Opy U.S., explained to TechCrunch that the Opy partnership will allow Amex to address the growing demand for financing options for larger purchases over extended timeframes.

Addressing the Need for Longer Repayment Periods

“For substantial items – and this is our specialization – purchases ranging from $1,000 to $20,000 often require more than 60 days to comfortably repay,” Shniderman stated.

Targeting Financially Savvy Consumers

Opy is able to offer competitive rates, capped at 9.99%, by concentrating on specific sectors that attract financially responsible customers. The average Opy customer is 40 years old, contrasting with the younger demographic typically served by other BNPL providers.

Currently, Opy also supports financing for home improvements and educational certifications, although these verticals are not included in the initial Amex partnership.

Transparency and Predictability in Financing

“Our product is designed to be predictable and transparent,” Shniderman emphasized. “Many other BNPL companies employ deferred interest and retroactive interest charges for missed payments, effectively recalculating 0% interest as a high rate throughout the loan’s duration.”

Shniderman, who previously worked with Amex at Deloitte, highlighted this distinction.

Industry-Wide BNPL Expansion

American Express’s competitors are also actively entering the BNPL space to maintain competitiveness with payments companies like Stripe and Square. Mastercard launched its own offering, Mastercard Installments, this fall.

Visa subsequently announced a partnership with Klarna.

Note: Mary Ann Azevedo contributed to this story.