Target offers ‘buy now, pay later’ option for holidays and beyond

Target is entering the rapidly-growing “buy now pay later” (BNPL) space with two new partners.

The discount giant is teaming up with BNPL platform providers Sezzle and Affirm to offer digital flexible payment options that let customers take home their purchases right away. Depending on what they want to buy and how long they would like to spread their payments out, Sezzle and Affirm offer Target shoppers a range of BNPL options, timelines and services based on guest eligibility.

Sezzle will split each eligible Target purchase into four interest-free payments over six weeks, with no fees if paid on time. To use the Sezzle flexible payment option, customers first apply with Sezzle online, then shop at the Target e-commerce site or mobile app and use the Sezzle virtual card as payment method at checkout.

Target customers can also use Sezzle with its same-day drive-up, order pickup, and delivery via its Shipt subsidiary fulfillment services, as well as in Target’s physical stores via Apple Pay or Google Pay. Sezzle is a 2019 graduate of one of Target’s accelerator programs, which brings technology startup companies together for retail boot camps to scale their businesses and bring them to market.

For purchases over $100, Affirm provides Target customers with a way to pay at their own pace with monthly payments. Customers digitally apply with Affirm to get started. Then, they can shop online at Target.com, choose Affirm as the payment method at checkout, and pick the monthly payment schedule of their choice. Customers will never pay more than you agreed at checkout, as Affirm doesn’t charge any late or hidden fees.

BNPL is quickly growing in popularity. According to data from eMarketer, more than 45 million U.S consumers (ages 14 and older) will use a BNPL platform in 2021, up 81.2% over the previous year.

And according to a recent study from Juniper Research, spending via BNPL services which are integrated within e-commerce checkout options, including fixed installment plans and flexible credit accounts, will reach $995 billion in 2026, up from $266 billion in 2021. Juniper Research analysis indicates this 274% growth will be fueled by a greater consumer appetite for credit to spread costs, particularly in the wake of personal finance pressure caused by the COVID-19 pandemic. 

This would help explain why two of Target’s chief rivals are also partnering with Affirm to offer BNPL services to their customers. Walmart has been allowing customers to use Affirm to make installment payments on purchases at more than 4,000 Walmart Supercenter stores and its e-commerce site since 2019, and is reportedly now replacing its holiday layaway program with a new BNPL service from Affirm. In August 2021, Amazon began testing the Affirm BNPL solution at online checkout with select customers.

“We know our guests want easy and affordable payment options that work within their family’s budget,” said Gemma Kubat, Target president of financial and retail services. “Through our partnerships with Affirm and Sezzle, Target is investing in new financial tools that make our shopping experiences more flexible and personalized to guests’ needs, right in time for the holiday season.”