“Buy Now, Pay Later” customers drove the billion-dollar US shopping spree on Black Friday and Cyber Monday. According to Adobe Analytics, buy Now, Pay Later sales reached an all-time high on Cyber Monday, up 43% from the previous year. Because more consumers were using Buy Now, Pay Later for larger purchases, the average number of products per order increased by 11% yearly.
Although Cyber Monday and Black Friday saw record-breaking internet purchases, consumers who rely on postponed payments may find themselves in a tight spot when their invoices arrive. According to financial researchers, buy Now, Pay Later transactions put consumers in danger of accruing debt they cannot pay off.
” Consumers seemed to be shopping lower-ticket discounted apparel and value offerings vs. higher-ticket items” at those stores, Robert F. Ohmes, a research analyst at Bank of America Securities, and other analysts wrote in a report after visiting stores on Black Friday.
Instalment plans that are BNPL have gained popularity among consumers and retailers alike. A purchase made through these services is divided into four or more installments, due over a few weeks or months. Unless payments are missed, BNPL accounts are normally issued with no interest or very little interest and frequently come without a hard credit check.
Buy Now Pay Later Numbers
The analytics company projects that on Monday, customers will spend between US$12 billion and US$12.4 billion on internet purchases. Out of such transactions, US $782 million were made with BNPL services like Klarna and Affirm; this is a 19% increase from the prior year.
While BNPL has become more and more common in recent years, thrifty consumers are now encouraging its use by avoiding paying more for credit card transactions in order to save money on fees and interest.
BNPL And Holidays
Economists predicted that the holiday season would be slower than in recent years because to the financial burden that consumers are bearing from ongoing inflation and rising interest rates. Promising evidence from Monday’s shopping frenzy, however, suggests that while consumer budgets have decreased from pre-pandemic levels, spending seems to have remained steady.
American customers increased their orders by 29% on Black Friday with Klarna, a business that offers buy-now, pay-later options.