November BNPL Spending Set to Soar to Record $9.3 Billion
Buy now, pay later (BNPL) continues to grow in the payment space, and its impact on consumer finances is even more important. Not only are consumers using the method more to pay for goods, but it is becoming a financial solution for those navigating high costs and inflation. With rising usage comes a rising need […]
The post November BNPL Spending Set to Soar to Record $9.3 Billion first appeared on PYMNTS.com.
Buy now, pay later (BNPL) continues to grow in the payment space, and its impact on consumer finances is even more important. Not only are consumers using the method more to pay for goods, but it is becoming a financial solution for those navigating high costs and inflation.
With rising usage comes a rising need for more regulations on the payment method. With consumers in the United Kingdom and the United States using BNPL more, concerns about whether consumers use it responsibly have risen. Whether BNPL use is a financially safe decision or a trap leading to more debt is a question users must weigh — and regulators must focus on.
The “FinTech Tracker®” explores the economic forces driving the upswing in BNPL usage, its shift from optional to necessary spending, and the mounting calls from critics for stronger regulations and safeguards.
BNPL Gains Ground as a Smart Finance Alternative
The economic pain of high interest rates and inflation drives consumers to explore alternatives to traditional credit solutions. BNPL is evolving beyond a mere payment alternative to become a crucial yet practical solution for helping to manage personal finances.
With high inflation and rising costs, consumers are turning to BNPL more as it is appealing due to its affordability. They also view it as an alternative to high-interest credit card debt. But as it can aid consumers in need, it can also have its pitfalls. Financially vulnerable consumers or those with credit card debt who use BNPL could worsen their situation. Regulators must work to warn consumers and protect them from financial ruin.
The Faces of BNPL
While consumers of all ages use BNPL, younger consumers are flocking to this payment method. Fifty percent of U.S. consumers ages 25 to 44 have used the payment method at least once. While some may use BNPL for luxury spending, many use it as a vital financial management tool. This includes spending on essentials such as groceries and to tide them over until they receive their next paycheck.
Maximizing Growth in the Retail Space
With BNPL use climbing, retailers must respond to the demand and find ways to strategically integrate this payment option. Doing so can bring in more customers, drive sales and, ultimately, give customers what they want. It can also help retailers to navigate economic volatility. Partnering with the right providers, educating customers and leveraging the appeal of BNPL can lead to growth and customer satisfaction.
About the Tracker
The “FinTech Tracker®,” a collaboration with Sezzle, examines the forces driving BNPL usage, its shift from optional to necessary spending and the mounting calls for stronger regulations and safeguards.
The post November BNPL Spending Set to Soar to Record $9.3 Billion first appeared on PYMNTS.com.