JPMorgan Chase is readying to move into the POS financing market, allowing customers to pay in installments for purchases worth $500 and above as well as acquire loans on pricier items.
JPMorgan card chief Jennifer Piepszak recently introduced the banking giant’s new product dubbed as “My Chase Plan.” This tool enables cardholders to pick past purchases worth more than $500 and opt to finance them for a more extended period by paying monthly fees, instead of interest-based repayment.
Through “My Chase Loan” that allows card customers to loan against credit lines to purchase more expensive items, the bank aims to expand its reach to the consumer lending space. Customers can request the loan through the bank’s mobile app after which, once approved, the bank would immediately transfer the money to their checking accounts.
The bank’s entry into the POS financing space comes after a new TransUnion report showing non-bank lenders are stretching their market share lead over banks. The data from the consumer credit reporting agency also show that fintech’s loan balances share increased to 38% in 2018, up from 35% in the previous year, while the share of banks fell from 30% in 2017 to 28% in 2018.
POS financing is not new. According to the Economist, this loan type is becoming popular in the U.S. Merchants in nine different retail categories reported Americans have made over 160 million POS loan applications, but only 53% were approved,
Instead of using credit cards for buying electronics, furniture, or home improvement items are increasingly preferring to borrow through POS loan method.