Buy Now Pay Later has come a long way in the last two years, and its introduction has made it simpler for everyone to buy the long-ticket items without paying the entire payment upfront.
The industry’s leading players like Klarna, Affirm, Afterpay, Sezzle, etc., have adopted the BNPL approach to ease the online shopping experience. CBInsights claim that Buy Now Pay Later is expected to triple its market share in North America by 2023. Eager to know more about this industry? Here are the top facts about the BNPL, courtesy of some research conducted by The Pearl Source, an L.A.-based pearl jewelry retailer offering BNPL options to its customers.
BNPL has witnessed 200% more growth during the pandemic
This financing system has been around us for a while but has achieved massive growth throughout 2020. According to the Per Fashion Trade General, WWD, Splitit (a card-based installment payment system), has gained attention during Q2 of 2020. The company has purchased more than $65 million in merchant sales during that quarter. Afterpay’s numbers from its latest investor’s reports are also reflecting the same story. By June 2021, this Australian-based firm had increased its US user base from 1.9 million to 5.6 million, increasing 219%.
Big purchases are gaining heights with BNPL
BNPL was mainly introduced to let the customers take their favorite item home without reaching into their savings accounts. The consumers will choose BNPL for those purchases that put big numbers on the board. Afterpay’s Co-Founder, Nick Molnar, reveals in the interview with Al Jazeera that customers use the Buy Now Pay Later services for the large-ticket items, and the average purchase from Afterpay through the BNPL method is more than $100. This approach is beneficial for merchants since employing this payment system can help their businesses move heavy ticket items easily. The BNPL can also potentially increase the average sale amount. According to the case study released by Klarna, fitness clothing retailer Gymshart observed a 33% increase in sales after adding the Buy Now Pay Later option.
Millennials are keen on using BNPL services
Since BNPL is a new concept, it automatically attracts the younger generation more than anyone. Data compiled by PYMNTS.com claims that around 87% of customers between the ages of 22 and 44 have expressed their interest in BNPL services. One of the best reasons for accepting this new approach is that millennials don’t have a credit card, and this is the perfect alternative to go for with a zero-interest fee. According to a survey by Bankrate, only 33% of those between 18 and 29 years are toting plastics.
A perfect interest-free payment alternative
Credit card issuers charge heavy interest rates on the card rate balance, which is why most people are getting distracted by the same and have started adopting the Buy Now Pay Later approach. A survey conducted by Ascents claims that customers are choosing BNPL because they don’t want to incur credit card charges. Around 38.3% of the people agreed that they had chosen this service because the item wouldn’t otherwise fit their budget.