Alliance Data buying installment lender Bread for $450M

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Alliance Data has agreed to purchase the point of sale installment lender Bread for $450 million and plans to make Bread’s buy now, pay later options available to credit card-issuing merchant clients.

Alliance Data said it will contribute $100 million of its stock in the deal, which is set to close before the end of the year.

Bread, founded in 2014, integrates directly with retailers on their e-commerce sites enabling various ways for consumers to pay over time. The New York company has raised about $200 million in venture capital funding.

Alliance Data said in the release it sees an immediate opportunity to expand its merchant clients’ reach to Bread’s largely millennial audience.

“With the timing of the holiday season upon us, the COVID-19 pandemic has accelerated the adoption of digital technologies, and perhaps nowhere as significantly as in financial services and payments,” Val Greer, Alliance Data’s chief commercial officer, said in a press release Thursday.

Luxury watch seller Hublot is among the companies that uses Bread's buy now, pay later offering.

Merchants already offering buy now, pay later options through Bread include Noémie, which sells jewelry online, the luxury watch seller Hublot and the crib mattress provider Newton Baby. Bread users typically split purchases of up to $1,000 into four equal segments to be repaid every two weeks with zero interest. Bread also offers options to spread out larger payments over three to 48 months.

Alliance Data noted in the release it will connect Bread to its new suite of digitally enhanced tools enabling seamless integration with merchants. Earlier this month the Columbus, Ohio, company announced it had moved card processing to Fiserv after years of handling it in-house.

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