How Arizona Financial Launched BNPL Inside Its Mobile Banking
By Matt Doffing, Senior Editor at The Financial Brand
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Buy Now, Pay Later has been a hot topic for banking institutions for years, and fintech companies have already established partnerships with major retailers that provide advantages in the marketplace.
Need to Know:
- Banking institutions are finding substantial demand for BNPL when they begin tracking transactions. Arizona Financial Credit Union saw tens of thousands of transactions flowing to BNPL providers.
- Community institutions have little chance of edging out fintechs in partnerships with major retailers, but they do own the digital banking channel. And most consumers would prefer to obtain banking services without adding financial apps.
- Using its own data, Arizona Financial has made 30,000 BNPL loans for amounts between $100 and $2,500 during the past year.
Arizona Financial Credit Union, a $3.79 billion institution based in Phoenix, and that serves more than 180,000 members, saw notable transaction volumes moving out to Buy Now, Pay Later companies. Eric Givens, SVP of Research and Development, and the credit union’s management team, began asking what many other institutions are now asking about BNPL:
- How might it affect credit card volumes and other types of consumer credit?
- How can a community institution add value?
- When fintechs are so conveniently looped into e-commerce checkout, how would a credit union access this marketplace?
- What underwriting parameters protect a credit union serving this kind of market?
Here’s how Arizona Financial answered these questions and now serves members with BNPL directly through online banking.
Members Weren’t Asking for it — or Were They?
During the holiday season of 2021, Arizona Financial decided to explore how many transactions were leaving the institution for BNPL providers.
“We wanted to see if people are really using [BNPL], especially post-pandemic, so we started measuring it,” Givens says. “We saw tens of thousands of transactions going out to BNPL vendors. We knew then we needed to see what we could do to offer this type of solution to our members.”
Arizona Financial was already seeking opportunities to originate additional earning assets. “When we saw membership already had a large amount of BNPL loans, we decided to move forward.”
The question then became: How could the credit union serve that demand in a way that added value?
A Closer Point of Access
While many users currently manage three or more finance apps, 86% prefer consolidating them into one app, with 91% willing to switch to a single app if it offers full functionality, according to MX and Finextra. Rather than adding another financial company to their lives, what if they only needed to log in to their current institution’s online banking to break a purchase into installments?
Through a partnership with equipifi, Arizona Financial created access to BNPL for members through online and mobile banking in a section that displays qualifying transactions as well as the offer associated with them.
“If a purchase meets the credit union’s criteria, the funds are deposited into their checking account,” Givens explained. “Members can choose a term from a set of options and then convert [their debit amount] into installments that include interest, and then they repay it over time as they would a loan.”
Members’ purchases can qualify if they are between $100 to $2,500. Repayment terms run from three to twelve months. The structure reflects a key design principle of the program: the credit union extends financing only after verifying that the member has already completed the purchase.
“If you made a debit card purchase for $2,000,” Givens says, “then you had those funds available at one point. We’re just allowing you to spread that payment out.”
More Data to Assess Creditworthiness
Many fintech BNPL providers rely on credit bureau checks or soft credit pulls to establish borrowers’ ability to repay. Arizona Financial’s program evaluates a member’s relationship with the credit union, transaction behavior, account history, and signs of financial stress.
Members, for example, must have a checking account that has been open for 90 days to qualify. Accounts that are currently overdrawn are not eligible for offers. Also, if a member has had one non-sufficient funds in the past two months, then they also would not be eligible. Members can hold a maximum of three active BNPL plans at a time. (The credit union plans to update these parameters once it completes its look-back analysis.)
When a transaction meets the program and ability-to-repay meet criteria, approval and funding happen automatically. “There’s no manual review,” Givens says. “The parameters are already set. Either the transaction qualifies, or it doesn’t.”
The design allows the credit union to compete for convenience.
An e-commerce-connected transaction, by comparison, is tied to the online checkout process and gains significant convenience from that. But it also requires consumer openness to a new financial app or relationship. Arizona Financial’s BNPL is executed after checkout, within the banking app the member already uses.
In that case, even though the transaction may be e-commerce, once members are aware of the option, they can choose to forgo one type of convenience in fintech BNPL, but they gain the ability to manage payments afterward within the same banking app where they manage their banking.
Soft Launch Found Immediate Member Adoption
Launched in March 2025, the BNPL program generated approximately 1,500 loans in the first month. In April, Arizona Financial saw over 1,000 additional loans, even with minimal advertising.
“We didn’t know exactly what to expect,” Givens says. “It exceeded what I thought we would see.”
In its first full year, the credit union has made nearly 30,000 BNPL loans.
“With a larger sample size, our lending team can reflect on the data, adjust parameters, and continue to improve the offering for our members,” he says.
Building More Member Value
Arizona Financial Credit Union has established its research and development department to investigate and facilitate new product launches by identifying market shifts, gathering data, arranging vendor demonstrations, and presenting findings to internal teams.
Last year’s debit-triggered BNPL launch is likely just the first that Arizona Financial will bring to the market. Givens and his team have prepared the background research and operational discussions to help the credit union launch a plan-your-purchase BNPL product. In this use case, the loan decision is made when the member is planning a larger purchase, such as a television or an appliance.
“A member could take out a $1,500 loan, for example, choose the term and loan amount, and have the funds deposited into their checking account. Then they can use their debit card to complete the purchase when they are ready,” Givens says.
Once Givens and his team find potential products that add value for members, especially when they have merit in dialogue with business-line leaders, the opportunity stays active. Even if the service cannot fit the agenda at the time, Arizona Financial archives research work, keeps the option alive, and revisits it when the roadmap, staffing, and strategy make sense.
