Buy Now Pay Later (BNPL) is becoming an increasingly popular payment method for e-commerce stores around the world. But is it really helping your bottom line? The answer is more complicated than you might think.
Credello, a leading personal finance tool that helps users get ahold of their finances, ran an extensive BNPL holiday shopping survey with Pollfish to find out how customers are using BNPL and the effects it has on their shopping habits. After receiving over 1,000 responses, it’s clear that customers have a lot to say when it comes to payment methods for shopping online. Here are six things we found to be the most surprising from that survey.
1. Nearly half of customers use BNPL to find new stores and offers
Forty-three percent of those surveyed said that using BNPL has helped them to find new stores and deals, suggesting that BNPL is helping shoppers explore new options and find what they’re looking for. Survey respondents specifically mentioned services like Klarna have become a popular method for seeking shops that offer products or services they’re looking for on a BNPL payment plan.
2. One-third of customers are willing to spend more with BNPL
Thirty-one percent of survey respondents admitted they’re willing to stretch their holiday budgets a little more than expected if BNPL is an option.
3. But those surveyed weren’t happy about it
Despite so many respondents saying they knew they’d most likely overextend their budgets, many weren’t happy about it. Forty-nine percent of survey respondents said they were concerned that BNPL might lead them to spend more than they normally would.
4. Almost all e-commerce shoppers expect to use BNPL during the holiday season
Over 800 of those surveyed said they planned to use BNPL during their holiday gift shopping. Interestingly, the answers emphasized those 800+ shoppers would use it for “most” of their holiday shopping this year.
5. Gen Z and Millennials are more comfortable using BNPL than Gen X and Baby Boomers
Being the primary generations raised online, it’s no surprise that those in the Gen Z and Millennial age groups were more comfortable using online payment services like BNPL. Over half of those under the age of 44 planned to use BNPL during the holiday season, while only 37% of those aged 54 or would and are instead opting for other payment methods.
6. But that doesn’t mean the younger shoppers are more loyal to brands
What’s most surprising is how BNPL is affecting brand loyalty. Older shoppers (aged 54+) said they planned to shop at a store first and then decide whether or not to use BNPL, while younger shoppers (under the age of 44) said the inverse; they would first look for BNPL options and then decide where to buy.
What online retailers should understand about the results of this survey?
While it’s clear that Buy Now, Pay Later is becoming increasingly popular (especially for younger shoppers), it’s critical to understand that it’s not something that necessarily creates brand loyalty that makes sustainable revenue YOY. What e-commerce shops should understand from this is that BNPL should be used as a way to drive new traffic and increase new customer conversions but is a poor way to promote loyalty, particularly if the customer demographic skews older and isn’t interested in the service.
So is it worth partnering with a BNPL service during the holiday season? The evidence of the survey seems to say “yes.” As record-high inflation makes more people question their holiday budgets, BNPL services can help retailers offer an affordable payment method for shoppers to use that’s convenient, fast, and secure.
Meredith Lepore is currently the editor of Credello. She is the former Director of Content for Ladders News and has written for Business Insider, InStyle.com, Travel & Leisure, The Observer, Marie Claire, Cosmopolitan, and SELF. She earned a Master’s in Journalism from the Newhouse School at Syracuse University.
