Travel financing has been around for a long time, but consumers still struggle to find the best way to fund their vacations. This is because travel needs vary so widely in the distance, length of stay, quality of hotel and flight, and so many other factors. There are no traditional solutions that are flexible enough to serve travelers going on a weekend trip two towns over just as well as the business traveler flying cross-country several times a year.
This is why modern fintechs have presented the perfect solution: buy now, pay later (BNPL) programs for travel. BNPL offers a few benefits that make it a great option for any traveler, no matter where they are going, which include:
- Low-to-no interest
- No credit impact
- Program length flexibility
Let’s go through each of these benefits, and how they make BNPL travel programs the one-size-fits-all option for travel financing.
BNPL programs offer short-term zero interest plans, usually 4 or 5 payments, that give them the edge over credit cards and travel loans. Even for longer payment plans, the interest rates are lower than credit cards and traditional loans, reducing the overall amount paid for travel.
Interest is one of the aspects of financing that drive most people away, especially those looking to finance smaller trips. The risk of racking up interest charges on a credit card with 15-20% APR makes financing that way hard to stomach, and personal loans with interest around 10% seem like overkill for shorter trips. BNPL bridges these gaps.
No Credit Impact
Payment plans through BNPL travel programs have a soft pull so they don’t report to credit bureaus as traditional loans do. These programs don't impact credit unless payments are made late. This is a massive advantage over traditional financing because many consumers don’t want their credit to take a hit for a one-off vacation.
By removing this long-lasting consequence from the equation, BNPL makes financing more accessible to all travelers, especially those with good credit that don’t want to risk their ability to get financing for more important things in the future.
Program Length Flexibility
As mentioned when discussing interest, there are a variety of program lengths available for BNPL. This means that, for smaller trips, consumers can simply break their purchase up into four equal payments to make it more manageable. On the other end, those who want to finance larger or more luxurious trips have the freedom to enter a payment agreement with a longer term length so that their payments aren’t too large.
This means that consumers aren’t stuck with a permanent debt source that may charge annual fees like a credit card, but they also can avoid the rigid term lengths that lenders offer for personal loans.
Offer BNPL Travel Programs With Skeps
To keep up with travel payment trends, airlines and lodging providers alike need a quality lending partner. Skeps offers the only end-to-end POS financing platform that can help merchants offer:
- Credit cards with rewards
- Travel loans
- BNPL payment plans
Our user-friendly software platform makes application, acceptance, and payment easy without taking consumers off of a merchant’s website. Our omnichannel functionality allows our application to be embedded within any website or app.
If a merchant is looking to make their consumers’ travel shopping experience faster, easier, and more flexible than ever before, there is no better partner to have than Skeps.