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The company will begin beta testing the product with some of its existing customers at select merchants later this year, CEO Richard Fairbank said. He declined to share more beyond saying the new offering wouldn’t be linked to the firm’s private-label credit-card business.
Capital One has been eyeing ways to juice loan growth in recent months. The McLean, Virginia-based firm has spent more on marketing in an effort to add new customers and has begun gradually increasing credit lines for existing clients. The lender’s latest move in the buy-now, pay-later business marks a bit of a reversal, though: last year, it barred customers from using Capital One credit cards for buy-now, pay-later options. “Competitors are amassing at the border, and it’s possible they will bid down the level of the merchant discount,” Fairbank said. “As there is a drop in margins, it could alter how the business works -- who pays for the loans, and which customers ultimately choose the product.”
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