Scooch on over Affirm: JPM Chase enters purchasing financing market
- JPM Chase plans to enter the point of sale lending market.
- With 'My Chase Plan', cardholders will be able to finance purchases of $500 and above.
JPM Chase is preparing to launch an option for cardholders to pay in installments for purchases over $500 and run up loans on bigger ticket items.
What’s happening: ‘My Chase Plan’ was unveiled by JPMorgan during the company’s investor day in New York on Tuesday. The tool allows card customers to select from past purchases of more than $500 and choose to finance them over a longer period with monthly fees, rather than an interest-based repayment
What’s the big deal: Purchase financing is a quickly growing trend. Alternatively knows as POS financing, more merchants and lenders are making it easy for customers to finance single purchases at the point of sale.
- Mastercard estimates the instant financing market at $1.7 trillion.
- More than a quarter of customers have used instant financing when shopping online.
There are a few banks like Regions and Fifth Third that are actively growing in this market. But, generally, this is business lost by banks and credit cards and is going to alternative lenders. Just 3 percent of banks and 12 percent of credit unions said that point of sale loans were a priority in 2019, according to research from Cornerstone Advisors.
Alternative lenders like Affirm, Greensky, and Klarna are leading the charge for consumer POS lending.
Other cards offer built-in installment plans: JPM Chase isn’t the first to introduce POS financing into its credit cards. Amex and Israel’s Isracard, for example, offer credit cards with built-in installment loans.