Retail-Branded BNPL Is Only a Matter of Time

Home goods retailer Bed Bath & Beyond ranked No. 50 on the National Retail Federation’s list of the top 100 retailers in 2021—smack dab between Walmart and ampm. Its new tiered loyalty program, however, places the retailer first in a very specific category: branded buy now pay later (BNPL) services. That’s because Bed Bath & Beyond’s Welcome Rewards program includes a feature called Welcome Pay, which allows shoppers to make multiple payments over time with zero fees or interest. In other words, BNPL. It’s arguably similar to Apple’s new offering, Apple Pay Later, but that service is available to other merchants. Welcome Pay, on the other hand, is for Bed Bath & Beyond (and its sister brands) only. More Than One-Third of Americans Have Missed BNPL Payments To be clear, Zach Weinberg, vp of ecommerce at performance marketing network Reprise Digital, noted Welcome Pay is powered by BNPL provider Zip and is one of multiple BNPL options Bed Bath & Beyond offers. Indeed, a spokesperson said Bed Bath & Beyond has partnerships with AfterPay, Klarna and Pay Later with PayPal, but did not comment further on why the retailer released its own branded service. “Nearly 50% of consumers spend more when using BNPL vendors as compared to credit cards, so it goes to reason that Bed Bath & Beyond would incorporate as many as possible, depending on which vendor consumers prefer,” Weinberg said. And so we may start seeing more of these retail-branded BNPL services. For one thing, Welcome Pay likely gives Bed Bath & Beyond access to more shopper data and possibly better processing times, Weinberg noted. Brad Jashinsky, director analyst at research firm Gartner, agreed control over data processing—along with being able to better integrate the checkout experience—should spur additional retailers to launch their own branded BNPL offerings. “I also expect that larger retailers will implement their own BNPL payment processing to reduce the percentage that goes to third parties,” he added. And, if they do, they will also likely white label a service from a third-party vendor. “Smaller BNPL payment solution companies have made announcements about offering completely white label solutions to brands,” Jashinsky said. “Those companies include Certegy, Splitit and Railsbank.” He noted only Splitit has shared the name of a retailer client, which is On Campus Marketing, an ecommerce platform that caters to college campuses. The partnership was announced in May but has not yet launched, Jashinksy added. Meanwhile, BNPL platforms will still want to get their branding in front of consumers to add brand awareness and legitimacy. “Federal and state regulators have recently scrutinized BNPL companies and are considering adding restrictions around how they can be offered,” Jashinksy said. “Any severe restrictions could make companies rethink their plans on how to invest and market their BNPL offerings.” Buy Now, Pay Later Platform Afterpay Introduces In-App Ads to Let Brands Spotlight Deals