Citi Retail Services has roll out The first product of its new embedded payments suite, Citi Pay, is called Citi Pay Credit. The Citi Pay Credit product is a digital credit card that can be offered by merchants at the point of sale. The company summarizes the product highlights as follows:
“Standalone line of credit: Citi Pay Credit offers a new line of credit that is separate from the Citi® Credit Card that customers may already have in their wallet. It allows customers to be intentional when they make large or unexpected purchases at participating retail partners.
Promotional Rate Financing: Citi Pay Credit allows participating retail partners to provide promotional financing to their customers. In addition, customers can choose a major purchase plan based on the products offered by the retailer.
Real-time approval: Customers interested in Citi Pay Credit can apply directly during the checkout process at participating retailers and receive real-time credit and authorization decisions before completing their purchase. “
In addition to Citi Pay Credit, the company also plans to add installment loan options to merchants in the future. Customers will pay in equal installments over a period of 6 to 60 months depending on the retailer. These longer payment terms suggest that Citi Pay is going after larger purchases — think Best Buy’s new 4K TV.
While customers prefer to use traditional card products such as general purpose credit and debit cards, private label “store” credit cards have gained popularity decline, partly due to innovations in POS lending products, such as buy now and pay later. We think Citi’s new solution is the best of both worlds, as it offers customers a loyalty product with store credit cards, while also offering POS financing opportunities, such as installment loans – note Affirm. Citi’s Retail Services segment has partnered with more than 20 retailers, particularly in the areas of home improvement, fuel, consumer electronics and specialty retailers. Could this be the next evolution of private label credit cards?
overview ben dannerSenior Research Analyst Javelin Strategy and Research.