The popularization of “Buy Now Pay Later” (BPNL) has enabled the payment option to extend beyond its initial launching pad of the retail consumer goods sector. The latest, pioneered by credit card provider American Express (Amex), will see BNPL enter the flight travel space. Entitled ‘Plan It’, Amex’s BNPL option will be eligible for air travel booked exclusively through AmexTravel.com, its travel platform.
Amex’s ‘Plan It’ feature will be eligible to use on flights of $100 and over. According to Shikha Narula, Vice President of U.S. Consumer Lending at Amex, BNPL is here to stay, and the introduction of ‘Plan It’ at point of sale within the Amex Travel Platform is a “natural progression” of the offering. Speaking further on this Narula said, “Integrating Plan It directly into the checkout experience will provide card members more payment flexibility for flight purchases of $100 or more, giving them an option to pay in monthly installments with a fixed monthly fee before they make the purchase.” The service will enable users to avoid interest charges on large purchases while paying off their charges in installments.
The release of this new feature is timely, given that travel bookings reported on American Express Travel are already up 50% sequentially in the first quarter. This coincides with the acceleration of vaccines being administered across the U.S., and a warmer season coming through, easing the conditions in which the COVID-19 virus thrives. Capitalizing on this will ensure that not only will Amex secure its customers’ travel intentions, it will also entice newer customers - in particular, millennials who’ve favored BNPL over all other spending cohorts. A recent Amex Trendex survey polling 2,000 travelers found that 62% of millennials intend to opt for a BNPL option when booking their next trip.
‘Plan It’ will also help existing Amex users who haven’t yet prioritized BNPL get comfortable with the option. It will likely entice more people into choosing Amex as their card, as the rewards system works the same. A pre-purchasing calculator will be included to help users pre-determine their payment installments and cross-reference with their feasible budgets. Consumers can potentially save money on ‘Plan It’ as well by staggering payments for big purchases and avoiding interest fees. However, they will still pay a fee (less than their interest payment) for the privilege of using the new feature.
