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Debit cards are emerging as credit-like alternative for enabling purchases driven by targeted offers and deals embedded into the apps of alt lenders combined with BNPL, cashback tiers and rewards being baked into them

August 1, 2025 //  by Finnovate

Although the credit card value proposition still works for many, it no longer works in every situation. The most important credential that has emerged for enabling payment and purchase flexibility is not a new type of credit card—it’s the debit card. And it’s not rewards that drive consumer use and adoption of those alternatives. It’s targeted offers and deals that put real money in the pockets of consumers every time they buy, embedded into the apps that those alternative credit providers provide.Then came BNPL. Users say the main appeal of this new pay-later category is predictability. A purchase divided into four or six or twelve or twenty-four equal payments becomes a known quantity. Klarna is piloting a Visa debit card in the U.S. that bakes in BNPL, cashback tiers and rewards. Sezzle now offers Pay-in-Five. Chase and US Bank are testing Pay-in-4 on debit cards. Debit BNPL is inclusive, serving those who can’t or won’t get a credit card. Smart credentials like Visa’s Flex and Mastercard’s One let consumers set rules for how they want to pay using a single PAN riding debit rails. For smaller banks, this makes them more competitive. For large issuers, it’s a challenge: meet demand or risk losing transactions. Debit, reimagined as a credit-lite alternative, could redefine what “paying with plastic” means. A card that acts like credit without credit checks or interest fees—and lets consumers set rules—starts to look like the future of credit.

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