Chase to Decline Credit Card Payments for Third-Party BNPL Plans

Chase told customers that it will stop allowing its credit cards to be used to pay for third-party buy now, pay later (BNPL) plans.

The bank said in a customer’s credit statement viewed by PYMNTS: “Effective October 10, 2024, you will not be able to use Chase credit cards to pay for third-party Buy Now Pay Later (‘BNPL’) installment plans. Payments to these installment plans (e.g., Klarna, AfterPay, etc.) using your Chase credit card will be declined.”

“If your Chase credit card is used for any of these recurring BNPL plans, please update the payment method with your BNPL Provider to avoid any missed payments or late fees (if applicable),” the statement added.

This change comes at a time when Chase offers its own BNPL option — Chase Pay Over Time — and was likely made to boost customers’ interest in its own offering, Newsweek reported Tuesday (July 16).

Chase did not immediately reply to PYMNTS request for comment.

Experts expect that other companies will follow Chase’s example, the Newsweek report said, adding that Chase is unlikely to encounter resistance from customers because it offers its own BNPL option and gave customers three months’ notice of the pending change in policy.

“Chase is doing something that other banks are slowly and methodically implementing: pushing customers to their own financial products,” Alex Beene, financial literacy instructor at the University of Tennessee at Martin, said in the report.

Traditional banks have been taking steps to enter the BNPL space, although they’re relatively muted steps thus far, PYMNTS reported in December 2023.

Some banks, including Chase and Citi, offer the option on card-based payments tied to select purchases over a certain dollar threshold.

In August 2023, Chase and Amazon expanded their installment payments offering by allowing Prime Visa and Amazon Visa cardmembers to start using the offering outside of Amazon’s website and mobile app.

The expanded program lets cardholders use the equal monthly payment offering on purchases of $50 or more at tens of thousands of retailers.

On Friday (July 12), Chase and Marriott said they teamed up to offer new benefits to Marriott Bonvoy loyalty card members, including giving them access to a new “Travel Now, Pay Later” benefit.