Buy now, pay later has become a familiar option at retail checkout. Now, the installment payment model is making its way into doctors’ and dentists’ offices.
Synchrony’s CareCredit platform is bringing the option to healthcare providers. The company is adding CareCredit Pay Later, a one-time installment loan that closes once the balance is paid in full, as an additional payment option for its healthcare credit card customers.
The offering is designed to help patients manage health expenses not covered by insurance.
“Installment lending options are increasingly becoming popular and consumers are expecting it at the point of sale for all types of merchants, even in the health and wellness segments,” said Ben Danner, Senior Debit Analyst at Javelin Strategy & Research.
“As with any BNPL service addition, it’s about flexibility and transparency around pricing,” he said. “The integrated program of revolving credit card or pay later option also streamlines the solution for health and wellness providers who can offer both without having to use multiple third parties.”
A Challenging Vertical
Healthcare payments rarely follow the same path as retail transactions, despite efforts by many payments firms to approach the industry like any other vertical.
The complexity of healthcare billing has helped drive the development of comprehensive revenue cycle management platforms, which handle insurance reimbursements, patient billing, and payments, among other functions. These interconnected processes have also made it difficult for newer options to gain transaction at healthcare checkouts.
Extending the Trend to Healthcare
Patients face growing out-of-pocket expenses as high-deductible insurance plans become more common, while elective treatments and products often fall outside insurance coverage.
For these expenses, BNPL products may offer an appealing alternative, as they have in retail. A study from HarrisX and the Financial Technology Association found that more than three-quarters of U.S. adults said BNPL helps ease financial strain, with many viewing it more favorably than revolving credit products.
Consumer expectations may also be shaping healthcare payment choices. CareCredit cited survey data showing that 80% of respondents said payment options influence their choice of provider, while more than three-quarters said flexible payment options were integral to choosing a treatment plan.
As patients place greater emphasis on affordability and payment flexibility, installment options could become a more common feature of healthcare and wellness payments.
