Absa Bank Kenya on Friday, June 30, introduced a first of its kind Buy Now Pay Later (BNPL) card feature for its credit card customers.
Dubbed “Buy Now Lipa Pole Pole”, it becomes the first BNPL credit card to be offered exclusively by a Kenyan commercial bank.
According to the lender, the BNPL feature aims at empowering customers to better manage their expenses by allowing them to extend payments made through their purchases by up to 12 months.
The service is available as a self-service payment option on the Absa mobile and internet banking platforms.
After making a purchase, credit card users can either pay for the transaction when the credit card bill falls due or activate the BNPL option that extends the repayment into instalments.
The purchaser can opt to repay in 3, 6, 9, or 12 months. Absa Bank Kenya says customers who utilise this feature will enjoy improved cash flow without affecting their shopping experience.
The interest applicable will be 2.5% per month for both the 3-month and 6-month options; and 2.67% per month for the 9 and 12-month tenures.
According to Absa Kenya’s Head of Card Payments, Linda Kimani, the new offering is intended to extend convenience to customers, especially coming in the middle of the high cost of living crisis - where many households are having to make difficult spending decisions.
“Given the prevailing economic environment in which many consumers are having to make tough spending decisions, we understand the growing need to manage one’s expenses and make purchases without straining one’s wallet. That’s why we’re excited to launch our BNPL card feature, which gives our customers the power and ease they need to pay for their purchases flexibly over time,” she explains.
Also Read: What to Know About Credit Cards in Kenya
Some of the payments that can be converted into the BNPL instalments include flights, vacation packages, electronic items, furniture, motor items, and school fees.
This is as long as the transaction value is at least Ksh10,000, which is the minimum credit card purchase amount that qualifies for conversion to Buy Now Lipa Pole Pole.
“By incorporating BNPL payments into their budgeting strategy, customers have more room to manage expenses such as payment of school fees or booking for holiday travel while maintaining a healthy financial outlook. We expect that the feature will give our customers more cash on hand and therefore more control over their finances, helping them to get things done,” adds Kimani.
The process can be summarised in these 5 easy steps:
Data from the Central Bank of Kenya (CBK) shows that card-based transactions recorded as of March 2023 surpassed 5,669,185, marking a 5.3% increase compared to the previous month.
This upward trend in the uptake of card services is further supported by a report by global consulting firm, McKinsey, which predicted a 150% growth in Africa’s overall cards market between 2020 and 2025.