The data: Twenty percent of US respondents plan to use buy now, pay later (BNPL) this holiday season, per a survey by the Electronic Transactions Association (ETA) and The Strawhecker Group (TSG).
Why it matters: Tougher economic challenges this year that may affect consumers’ holiday shopping—making flexible payment methods like BNPL more appealing.
BNPL tends to be popular around the holidays—but economic anxieties may make consumers even more likely to lean on BNPL this year. US BNPL spending per user is expected to increase 13.5% year over year (YoY) in 2022 and reach $957.46, according to Insider Intelligence forecasts. Last year, the average US BNPL user spent $843.37.
What this means for payment players: Holiday spending is set to be a major boost for BNPL incumbents like Afterpay and Klarna as consumers try to stretch their holiday budgets. Partnerships with high-traffic retailers like Amazon and Target will help bolster providers’ payments volume and revenues.
This could help BNPL incumbents navigate the onslaught of tighter funding, incoming regulation, and competition from payment heavyweights like Visa and Mastercard, which have been ramping up their BNPL programs. At stake is an expected $75.60 billion in US BNPL payment volume this year, per Insider Intelligence forecasts.
Related content: Check out our US Buy Now, Pay Later Forecast 2022 spotlight report to learn about the factors influencing the sector’s growth in 2022.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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