Capital One Financial Corp. will test a new buy-now, pay-later service as consumers flock to the options that let them split up a purchase and pay it off over time.
The company will begin beta testing the product with some of its existing customers at select merchants later this year, Chief Executive Officer Richard Fairbank said Monday at an investor conference. He declined to share more beyond saying the new offering wouldn’t be linked to the firm’s private-label credit-card business.
Buy-now, pay-later options—with names such as Afterpay Ltd. and Affirm Holdings Inc.—have swelled in popularity in recent years, especially among younger consumers looking to pay off purchases over time and often without interest. The offerings make most of their money by charging merchants a fee each time a consumers uses the product at checkout.