Advertisement
12/14/2020

Survey: ‘Buy now, pay later’ prompts consumer spending

Dan Berthiaume
Senior Editor, Technology
Dan Berthiaume profile picture

The availability of buy now, pay later (BNPL) purchases can have a positive impact on basket totals.

According to a new survey of 1,003 consumers who have made a BNPL purchase conducted by online deal platform CouponFollow, 73% said their most recent BNPL purchase allowed them to add something to their cart or buy something more expensive due to the monthly installment option. One in three respondents would not have been able to make their latest purchases without a BNPL plan.

Instead of paying the full price of a purchase outright when checking out with a credit or debit card, BNPL enables shoppers to break the total purchase into smaller payments, often without interest, that can be billed to an account of their choosing. 

When asked what types of products they are purchasing via BNPL, respondents most common answers included consumer electronics (54%), beauty and health (46%), home and garden (38%), games, books, entertainment and media (37%), baby products (24%), and automotive parts/accessories (24%).

Average amounts financed by product category included $1,187 for home and garden, $629 for consumer electronics, and $249 for beauty and health. The same percentage (20%) of respondents are using BNPL options to finance purchases both in the range of more than $1,000 and less than $100. More than three-quarters (77%) will rely on BNPL for holiday purchases this year.

Respondents were also allowed to select from a variety of potential BNPL issues they may have experienced. Leading issues included interest rate too high (31%), unexpected interest rate (30%), missed payment (28%), late payment fees (27%), and expensive monthly payments (22%). Thirty-two percent did not select any negative scenario.

The survey also asked respondents what BNPL service(s) they have used. Afterpay was clearly the most popular with 33% of respondents having leveraged this service. Other top responses included Affirm (18%), QuadPay (16%), Bread (10%), and Klarna (8%).