How Citi is strengthening its merchant relationships through Citi Pay

BNPL solutions are a prime example of the intersection of shopping with financial services, effectively integrating financial firms into the consumer’s purchase journey. An emerging trend is the growing involvement of financial institutions in the loan installment market. This is spurred on by the pressure to compete with non-bank players and address the shifting demands of enterprise retailers.

Citizens is one of the few banks that offers installment loans akin to BNPL programs through Citizens Pay — enabling consumers’ access to a revolving line of credit. Launched in 2015 and rebranded as Citizens Pay in 2021, the offering enables merchants to offer financing options to consumers at checkout.

Most recently, Citi’s Retail Services team took a step forward by offering installment loans to shoppers through its network of merchants. Last year, the bank introduced Citi Pay, a proprietary suite of pay-over-time solutions that includes digital credit lines and merchant installment loans, helping consumers split large purchases into smaller payments. Through Citi Pay Credit and Citi Pay Installment Loan, consumers apply for approval as they shop, with credit evaluation happening in the background.

“Citi has an API integration with a third-party credit bureau that allows for real-time bureau unfreezing during the application process,” shares Kartik Mani, Head of Citi Retail Services.

The role of technology in Citi Pay’s growth

The relationship between banks and major retailers is evolving, fueled not only by new product launches but also by technology-driven changes in service design and execution.

With over three decades of experience operating at the crossroads of retailers and their customers, Citi gained insight into the rising demand from both sides for technology to enhance shopping and payment experiences.

“From operating in this space, the consensus is clear: retail customer preferences are constantly evolving, and they’re demanding digital-driven payment products that are highly personal,” notes Mani. “For Citi Retail Services, technology is especially integral to how we partner with retailers today.”

Terry O’Neil, Managing Director of Embedded Payments and Strategic Growth at Citi, double-clicked on this point in a recent Tearsheet Podcast episode. “What we heard, pretty loud and clear, from the merchants and the consumers that we spoke to, was that point of sale lending, or buy now pay later, is here to stay,” he said.

All of this culminated in the creation of Citi Pay.

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