Buy now, pay later for travel is becoming an increasingly popular payment option as consumers seek greater flexibility when booking flights and vacations. By allowing travelers to spread the cost of airfare over time, these installment payment solutions make travel more accessible while giving consumers additional control over their budgets.
As airlines, travel providers, and financial institutions expand their payment offerings, BNPL solutions are becoming a key part of the travel booking experience. Integrating installment payments directly into airline and travel platforms helps meet evolving consumer expectations while creating new opportunities to drive bookings and customer loyalty.
BNPL has been taking the payments world by storm – offering consumers the chance to take out installment loans at the POS, or afterward in a mobile app or website. The BNPL product has made its way to the travel segments often called ‘Book Now, Pay Later” on popular e-commerce sites such as Expedia, which partner with a third-party BNPL provider such as Affirm.
Recently, American Express and Delta Air Lines have partnered to offer the American Express version of BNPL called Plan It®:
“American Express and Delta Air Lines have been longtime partners in the card space, and today they announced that they’re giving consumers more flexibility to pay for flights over time. Starting Feb. 17, American Express cardholders will be able to use Plan It®, Amex’s branded buy now, pay later (BNPL) feature, to cover Delta flights of $100 or more.”
In many ways, the partnership makes sense given American Express’ legacy as a credit card for those that travel. It’s also advantageous to be offering a BNPL product right now – a market which we forecast to surpass $100 billion annually in 2024.
The continued growth of buy now, pay later for travel reflects the broader expansion of installment payments across the payments ecosystem. As consumers increasingly look for flexible financing options, travel providers and payment companies are partnering to make BNPL a seamless part of the booking process.
With travel remaining a significant consumer spending category, installment payment solutions are likely to become an increasingly important differentiator for airlines, card issuers, and travel platforms. Companies that offer convenient, transparent financing options will be well positioned to enhance the customer experience and encourage repeat bookings.
Overview by Ben Danner, Research Analyst at Mercator Advisory Group
