Orders made via buy now, pay later (BNPL) increased 85% over Cyber Five, according to Adobe Analytics. “It’s a win-win for retailers” as it increases basket size and boosts conversion rates, our analyst Grace Broadbent said on the “Behind the Numbers: Reimagining Retail” podcast.
Buy now, why now? Shoppers, especially younger ones, are cash-strapped this holiday season. But after two years of restrictions, many want to spend, even as the cost of goods goes up.
Expect a “holiday hangover” in the first quarter. “There’s going to be a bit more of a reckoning next year,” Canaves said. BNPL users who spent heavily in December will likely be more reserved with spending in the following few months.
But even with a potential post-holiday slump, BNPL is here to stay. “It’s getting into people’s habits, their routines, to pay with this, and we definitely expect those habits to continue on,” said Broadbent.
Gen Z will use BNPL for life, according to Broadbent. “They will also adopt credit cards, but I think it’s going to be a both situation and not an either/or,” which is something our forecast reflects.
BNPL will change credit card use, not the other way around. “Savvy BNPL users will use credit cards to pay for BNPL purchases. It will spread the purchases out a little further and allow them to gain the rewards of the credit cards,” according to Canaves.
Proceed with caution, because the BNPL landscape is definitely changing.
Key takeaways: BNPL is here to stay, even as the fintechs that invented the service face challenges. That’s good news for retailers, but it’s a risk to consumers. Nonetheless, the BNPL train is already rolling, and come 2026, close to 40% of US internet users will be buying now and paying later.
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