American Express is diving further into installment lending, launching a new option for credit card customers to pay for flights in monthly chunks through its travel platform.
Customers are now able to use Amex’s "Plan It" feature — which lets customers set up installment plans for card purchases above $100 — for any flights they book on the American Express Travel website. That essentially moves the Plan It feature up directly to the point of sale, rather than requiring customers to log into their Amex accounts and switch a prior card purchase to an installment plan after the fact.
The move is another step forward for the "buy now, pay later" model, which major card players are
Amex was a pioneer among major credit card issuers offering installment options when it rolled out its Plan It feature in 2017. Since then, Amex cardholders have established some 6 million installment plans on roughly $5 billion of purchases, the company says. Millennial and Gen Z customers make up almost half of those plans, reflecting a growing preference among these groups for more predictable monthly payments.
“Buy now, pay later as a functionality is here to stay,” said Shikha Narula, vice president of U.S. consumer lending products at American Express. “As consumer needs continue to change … we will continue to make sure that we show up in the best way for our customers.”
Adding the Plan It function at the point of sale on the Amex Travel platform is a “natural progression” of the offering, she said. It will also help introduce Plan It to existing Amex customers who have yet to adopt the option but may use it for their next flight.
The launch comes in the early stages of an expected boom in travel, as pandemic restrictions ease and COVID-19 vaccinations give customers more confidence to book flights.
A recent Amex Trendex survey, conducted by Morning Consult and polling 2,000 travelers, found 62% of millennials planned on using a buy now, pay later option for their next trip. Twenty-two percent of the survey’s respondents have used a buy now, pay later option, including 40% of millennials, the survey found.
The new feature will be limited to flights booked on the Amex Travel platform, though later this year prepaid hotel bookings will be added as an option.
That means Amex card customers who book flights on Expedia or other travel sites will still need to log onto Amex to switch to an installment plan after their purchase.
Customers can do so “pretty seamlessly” and are reminded of the Plan It option when they look at their recent transactions, Narula said. But Amex is continuing to explore options to integrate Plan It at the point of sale on non-Amex websites, she added.
