Is Citibank planning to give the BNPL industry a run for its money? The invitation-only Installment Payment Plan (or IPP; perhaps theyโll give it a snazzier name when itโs ready for prime time) suggests so.
Whatโs so special about this IPP? Donโt all banks have one? Yes, but Citibank cardholders will be able to earn rewards on their installment payments. In contrast, other banksโ installment payment plans are explicitly excluded from earning miles, points, or cashback.
How does Citiโs IPP work?
At the moment, Citiโs IPP scheme is limited to targeted customers. You must transact at selected merchants and receive an SMS from Citibank inviting you to participate.
| โ Which merchants are eligible? |
| The specific merchants are not named; I asked Citibank about this and was told they include a โwide range of merchants in the electronics, beauty, healthcare, education, clothes and apparels categoriesโ |
Hereโs how Citi describes the process:
- Perform transactions at selected merchants using your Citi Credit Card
- If eligible, you will receive an SMS sent to your mobile number registered with Citi
- Click on the offer link within the SMS. Please note that the offer has a limited validity period as indicated within the message
- On the offer page, select the repayment plan. Click on โView repayment scheduleโ to view the monthly payable amount
- Review the terms and conditions and click on โConfirm and convert nowโ to proceed
Based on the T&Cs, IPP will only be offered for transactions of at least S$100. Installments will be spread out over three months, and thereโs no upfront fee, or any sort of fee for that matter provided you pay your monthly installment on time.
If you miss your payment, the remaining balance is subject to a late payment charge plus daily interest at:
- S$3 per month or
- Retail interest rate set out in the statement of account, whichever is greater
You may also be subject to late payment charges as governed by the cardmemberโs agreement on your Citi credit card account. Hereโs a worked illustration from the T&Cs:
| Statement Date | 15-Feb |
| Payment Due Date | 12-Mar |
| Billed IPP installment amount | S$500 |
| Retail interest rate as set out in the statement of account | 26.9% p.a |
| Min. payment specified in statement of account | S$50 |
| Payment made on 20 Feb | S$50 |
| Interest charged on the billed IPP installment amount (S$500) from current statement date till payment date at retail interest rate 26.9% p.a. | S$1.47 |
| Remaining unpaid IPP installment amount | S$450 |
| Interest charged on the unpaid portion of the billed IPP installment amount ($450) from payment date till next statement of account at retail interest rate 26.9%p.a. | S$7.96 |
| Total interest payable | S$9.43 |
Thatโs a different approach compared to traditional BNPL platforms, which charge late fees instead of interest. These late fees may be fixed, or vary slightly depending on the size of the purchase.
| BNPL Platform | Installments | Late Payment Penalty |
 |
3 months | S$3 or retail interest plus late payment charge |
 Merchant List |
3 months | S$20-60 |
 Merchant List |
3 months | S$5-30 |
 Merchant List |
3 months | From S$15 |
 Merchant List |
3 months | S$10-60 |
 Merchant List |
3 months or 4 fortnights | S$1-40 |
 Merchant List |
3 months | None |
You can earn credit card rewards with BNPL services as Iโve laid out here, but based on the comments it can sometimes be hit and miss.
Citi has clarified that IPP installments will earn rewards at the regular rate that the respective credit card normally would. In other words, Citi PremierMiles cardholders would earn 1.2 mpd, Citi Prestige cardholders 1.3 mpd and so on. Even better, Citi has further clarified that if you hold a Citi Rewards Card, youโll also be eligible to earn 10X points on eligible transactions as per normal.
How is this different from Citi PayLite?
If youโve tinkered around with Citiโs installment plans before, you may be aware of something called Citi PayLite. Hereโs what I see as the main differences:
| IPP | Citi PayLite | |
| Eligible Transactions | Selected merchants | Any merchant |
| Upfront Fee | None | 2% |
| Earn Rewards | Yes | No |
| Installments | 3 months | Up to 36 months |
| Min. Amount | S$100 | S$50 |
Citi PayLite is more akin to the traditional installment plans offered by other banks, and IPP is more in line with a BNPL service. However, Citi is conflating the two slightly, because in the IPPโs T&Cs it states that โthe entire Purchase Amount will be reflected as a โCiti PayLiteโ installment loan in your Card statement of accountโ.
Conclusion
I should probably reiterate what I said before when I first wrote about BNPL services. BNPLs are great if you know how to use them; dangerous otherwise. If you use BNPL purely to optimize your rewards and never pay a cent of late fees, then go for it. If you think BNPL might tempt you to spend beyond your means, avoid it like the plague.
Since Iโm approaching this purely from a rewards angle and intend to make payments in full and on time, thereโs no reason why I wouldnโt opt for the IPP if I got the SMS on one of my transactions.
Has anyone received an invitation to the Citi IPP? What merchant was it with?
Theoretically I agree it makes sense. But still, I think the risk (the tracking of and missing points, refunds, dealing with confused CSOs etc.) outweigh the benefits of the BNPL (% return on your $200 you kept aside in the bank which would otherwise had gone into an investment, even on a rolling basis etc.)
If not for cashflow needs (which one should avoid this like the plague), I personally do not see much upside unless itโs a huge ticket item > $10k
Totally agree.
I had just shared my experience using Citi Rewards Visa card for an Atome purchase. The grief and frustration is absolutely NOT worth the few thousand miles involved.
Citibank is NO longer the bank it used to beโฆ
3 months max so savings maybe not worth the effort or risk. Best FD rate in SGD for < 3 month tenure is 0.15%. So $100K FD for 1 month is $12.50 interest. For 300K BNPL thatโs total $37.50 to $75.00 savings if placed in FD pending payment (depending on the start date of Citi payments vs FD dates). For $900K BNPL itโs $112.50 to $225.00. Credit limits in SG generally top out at 1 million. Cars, jewellery/watches, art, anything else? Possible scenario is for a must-purchase item (what could it be?) and maybe avoid cashing out a current positionโฆ Read more ยป
for the Citi IPP, itโs for โSelected Merchantsโ only. So far, I only received the IPP Offer SMS for Qoo10 transactions only. not sure which are the other โSelected Merchantsโ, itโs not stated on their website: Instalment Payment Plan (citibank.com.sg) However, Iโm more concerned that, how this Citi IPP will appear on the Credit Bureau Report (CBS Report). eg. after we placed the Existing Transactions of eg. $100 under Citi IPP on Card A, and subsequently spends another New Big Transaction of eg. $10,000 (Not on Citi IPP) on same Card A. Will the CBS Report shows both the $100โฆ Read more ยป