Capital One is rolling this out as competition for consumer loans builds from financial technology firms providing merchants with easy ways to offer cheap financing for purchases. Chief Executive Richard Fairbank said the test will include point-of-sale loans for customers at a "select set of merchants" with which it already has relationships.
"The elephant in the room is the sustainability of the merchant subsidy," Fairbank said. "This is fueled by merchants' beliefs that they're getting incremental volume."