During these uncertain economic times it’s good to know shoppers have more options when it comes to paying for the products they need. For families living paycheck to paycheck it can be very difficult to budget for necessary items and many consumers are turning to buy online, pay later (BNPL) services to break up their purchases into several paid installments. Many of these plans which are a high-tech twist on traditional layaway plans are also interest free making it easier for consumers to manage their expenses.
According to a recent study on global payment trends, buy online, pay later (BNPL) services are poised for explosive growth to jump 181% from 1.6% in 2020 to 4.5% by 2024. Bank transfers, charge cards, cash on delivery and other services are expected to decline in the coming years as a result.
Many popular BNPL payment programs from companies like Affirm, Afterpay, Uplift and Klarna grew 166% in March 2021 over the same period last year according to a recent report in USA Today. These buy now, pay later providers have spent years slowly infiltrating the retail market through partnerships with merchants, but the pandemic has accelerated their popularity among online retailers, from luxury brands to independent shops to fast-fashion sites.
Unsurprisingly, this shift in payment preferences is being driven by millennials and Gen Z shoppers who have long embraced digital options due to their speed and ease of use. However, retailers themselves also are playing an important part in the growth: as more and more companies accept and advertise these options, it becomes more convenient for customers to utilize them.