Arizona Financial’s BNPL Success: Seamless Integration into Mobile Banking

The Buy Now, Pay Later (BNPL) trend has rapidly reshaped consumer financing, posing both challenges and opportunities for traditional banking institutions. While fintech companies have largely dominated the e-commerce landscape through partnerships with major retailers, credit unions and banks are discovering a significant demand for BNPL services within their existing member base. Arizona Financial Credit Union, a $3.79 billion institution serving over 180,000 members in Phoenix, recognized this growing market and strategically integrated BNPL directly into its mobile banking platform.

For years, BNPL providers have seen tens of thousands of transactions flowing from credit union members to their services. This insight prompted Eric Givens, SVP of Research and Development at Arizona Financial, and his team to explore critical questions:

• How would BNPL impact existing credit card volumes and other consumer credit products?
• What unique value could a community financial institution offer in this competitive space?
• How could they access the BNPL market given fintechs’ strong e-commerce integrations?
• What underwriting safeguards were necessary for responsible lending in this segment?

Arizona Financial’s journey led to the successful launch of an in-app BNPL solution, providing members with a convenient and trusted option without needing external financial applications. Over the past year, this initiative has resulted in approximately 30,000 BNPL loans ranging from $100 to $2,500.

Uncovering Hidden Demand for Flexible Payments

The decision to pursue BNPL wasn’t driven by direct member requests, but by data analysis. During the 2021 holiday season, Arizona Financial began tracking transactions leaving the credit union for BNPL providers. The findings were compelling: tens of thousands of transactions revealed a clear, unmet need among their members. This internal data, coupled with the credit union’s goal of originating additional earning assets, solidified the commitment to develop a proprietary BNPL offering.

The core challenge then shifted to designing a solution that truly added value for members and leveraged the credit union’s inherent advantages.

Consolidating Financial Services Within a Single App

In an era where consumers often juggle multiple finance apps, research from MX and Finextra indicates that a significant majority (86%) prefer consolidating their financial services into a single application, with 91% willing to switch for comprehensive functionality. Arizona Financial capitalized on this preference, aiming to offer BNPL directly within its existing mobile and online banking channels, thereby enhancing convenience and trust.

Through a strategic partnership with equipifi, Arizona Financial developed a seamless BNPL experience. Members can now view qualifying debit card transactions within their banking app and choose to convert them into installment plans. Here’s how it works:

• If a purchase meets the credit union’s criteria (typically between $100 and $2,500), the member receives an offer.
• Upon acceptance, funds are deposited into their checking account.
• Members select a repayment term, typically ranging from three to twelve months, and repay the loan with interest over time.

A key design principle is that financing is extended *after* the member has already completed the purchase. This approach ensures the member had the initial funds available, allowing the credit union to help them spread out larger payments made with their debit card.

Leveraging Internal Data for Responsible Underwriting

Unlike many fintech BNPL providers that rely primarily on credit bureau checks, Arizona Financial’s program integrates a more holistic assessment. It evaluates a member’s overall relationship with the credit union, including transaction behavior, account history, and signs of financial stress. Specific eligibility criteria include:

• A checking account open for at least 90 days.
• No currently overdrawn accounts.
• No more than one non-sufficient funds (NSF) incident in the past two months.
• A maximum of three active BNPL plans per member.

This automated, data-driven approval process ensures efficiency and consistency. There’s no manual review; transactions either qualify based on pre-set parameters or they don’t, allowing Arizona Financial to compete effectively on convenience.

While e-commerce-integrated BNPL offers immediate convenience at checkout, Arizona Financial’s post-purchase model provides a different form of convenience: managing all financial services within a single, trusted app. Members can choose to forgo the point-of-sale BNPL option in favor of the familiar and consolidated experience offered by their credit union.

Immediate Adoption and Future Expansion

Following a soft launch in March 2025, the BNPL program quickly gained traction, generating approximately 1,500 loans in its first month and over 1,000 more in April, despite minimal advertising. The initial success exceeded expectations, with nearly 30,000 BNPL loans issued in its first full year.

Arizona Financial’s dedicated Research and Development department continues to drive innovation, constantly monitoring market shifts and exploring new product opportunities. Building on the success of the debit-triggered BNPL, the credit union is already preparing to launch a “plan-your-purchase” BNPL product. This future offering will allow members to secure a loan for larger planned purchases, such as appliances, and have the funds deposited into their checking account to use when ready.

By identifying member needs, leveraging technology, and prioritizing convenience within a trusted relationship, Arizona Financial Credit Union is setting a benchmark for how traditional financial institutions can successfully integrate innovative services like BNPL into their core offerings, enhancing member value and driving growth.

Source: thefinancialbrand.com