Survey: Buy now, pay later proves popular with holiday shoppers

Retailers looking to maximize their holiday appeal should offer a buy now, pay later (BNPL) purchase financing option.

According to a recent survey of 1,000 adult U.S. consumers who plan to use BNPL for holiday shopping from personal finance platform Credello and Pollfish, 43% of respondents will use BNPL apps such as Klarna to find stores and offers this holiday season. Forty percent plan to use the BNPL payment method for most of their holiday shopping.

BNPL solutions enable consumers to spread the cost of their purchases without interest charges; making them an alternative to credit cards. Additionally, BNPL services do not require hard credit checks, and an increasing number of retailers are accepting BNPL as a payment method.

Three in 10 (31%) survey respondents that they would be willing to extend their budget for a specific purchase if BNPL is available, while almost one in four (23%) strongly agree that if a store or online retail site doesn’t offer BNPL, they would be less likely to shop there.

Beyond holiday gifts for others, product categories where respondents plan to use BNPL payments include:

• Clothing (50%).
• Holiday party/entertaining (26%).
• Home improvement (23%).
• Travel (21%).

Other notable findings include:

• For Gen Z and millennial respondents, BNPL is the driving force behind their choice of retailer. For older respondents, shopping at a specific store is still the most important deciding factor. They will then use whatever BNPL platform the retailer provides to complete their purchase.
• Male BNPL shoppers relied on the financing option to buy premium gifts for themselves more than women – 59% of male respondents would treat themselves with BNPL this holiday season, compared to 37% of women.
• Nearly 50% of BNPL shoppers are worried that they would spend more with BNPL than they normally would, and that worry increases with age.
• About one in three respondents strongly agreed they will shop online more than in physical stores due to more BNPL options online.

The top reasons shoppers use buy now, pay later are…

According to a recent survey of 1,000 consumers who have made a BNPL payment at least once from Forbes Advisor and OnePoll, the number one reason respondents use BNPL is to reduce the impact of a big purchase (66%), followed by buying something they can’t afford right now.

Other leading reasons for using BNPL include staying within a monthly budget (45%), buying more things at once (39%), and justifying a spontaneous or indulgent purchase (24%). Two reasons related to credit cards made the list: getting around a credit card limit (19%) and inability to obtain credit card approval (13%).