Buy Now Pay Later (BNPL) services have exploded in popularity–offering shoppers an alternative to credit cards and without impacting their credit. With Buy Now Pay Later plans, consumers make a down payment on a purchase and get to take the item home right then and there, or have the item shipped. The remainder of the payments are collected in installments, typically spread out over a few weeks or a month at a time, and those payments are directly drawn from the original payment method used.

Allied Payments conducted a Google Survey of 1,500 individuals across the United States to better gauge expected Buy Now Pay Later (BNPL) usage in 2022, and the study revealed some surprising Buy Now Pay Later statistics. Overall, a record 17 percent of respondents said they planned to use Buy Now Pay Later services in the year ahead, and there are emerging trends among specific customer demographics. The survey results show more people between 18 and 34 are choosing these services than ever before–and more so than any other generation. With this key demographic changing its approach to credit and paying for large purchases, companies need to shift along with them–or risk being left behind.

Over the past two years, consumer prices have been on a steep upward climb. In October 2021, the U.S. consumer price index had risen 6.2 percent from the year before, with clothing costs increasing more than four percent and electronics climbing more than 10 percent year-over-year. As costs continue to rise, consumers are looking for ways to stretch their dollar a little further–without damaging or impacting their credit.

And the business world is taking notice. Financial experts predict Buy Now Pay Later payment plans will likely pick up even more traction in 2022, and eventually become the norm over typical payment processing. Using these payment systems is smart for retailers, especially now that the “pandemic economy” has continued for more than two years. Over the past year alone, more major retailers have partnered with Buy Now Pay Later services, including Amazon and Target, and other companies, specifically payment services such as PayPal and Apple Pay, have launched their own proprietary installment payment systems.

While major retailers still utilize standard credit card processing for purchases, over the past few years, more major retailers have done away with layaway programs, leaving a gap for some shoppers who relied on paying a little at a time. But Buy Now Pay Later programs offer several advantages over traditional layaway, which requires shoppers to pay off a purchase before taking it home. With Buy Now Pay Later, the customer receives the item after making the initial payment, which means retailers don’t have to find storage space to hold onto those products.

With Buy Now Pay Later plans, retailers are also able to reach a wider customer base by offering predictable and pre-set payment plans, which allows more shoppers to get goods and services they need without paying for everything up front, and without accruing interest on those purchases.

Unlike credit cards, there are no hidden or additional fees, annual interest charges, or credit reporting, as long as the payments are kept up to date. And Buy Now Pay Later plans are an ideal choice for someone looking to make a larger purchase but doesn’t want to spend it all up front. Buy Now Pay Later allows shoppers to spread out large purchase payments over time, allowing them to get the items they need, while slowly managing the payments.

In fact, financial market reports show point-of-sale loans have helped increase retail conversion rates by 20 percent to 30 percent and have increased the average sale price between 30 percent and 50 percent. Research shows by offering these point-of-sale payment options, shoppers will not only spend more but are more likely to remain loyal to that company. And for retailers, these payment plans are simple to manage, and can help boost the bottom line.

Useful Resource: https://www.alliedpay.com/ecommerce-statistics/

Source: https://thenewsfront.com/allied-payments-buy-now-pay-later-how-services-are-helping-retailers-attract-new-customers-and-get-higher-conversions/