New research from The Strawhecker Group analyzes consumer attitudes, market trends, and year over year comparisons. Read the press release
TSG has released survey results from over 500 U.S. consumers covering the Buy Now, Pay Later (BNPL) market. The complete findings, covered in TSG’s new report titled Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes Part 2, highlight the current market and emerging trends in the BNPL space, as well as how consumer expectations and experiences have changed in the past year.
Consumers enjoy Buy Now, Pay Later (BNPL) for various reasons, but new data shows that 80% of people rate ‘zero interest’ as the most critical factor when choosing a BNPL provider. Other key factors included easy returns, no late fees, a short application process, and a corresponding payment app.
“The rise of BNPL can be attributed to a number of economic and social drivers; however, aside from outside forces, little study has been made of the types of factors consumers look for in a BNPL installment loan product itself, said Jared Drieling, Senior Director of Market Intelligence and Insights at TSG.”
BNPL has grown in acceptance over the past few years, especially across Europe, Asia, Australia, and parts of South America. As eCommerce spending increases and the avoidance of credit card debt continue to be a priority to consumers, BNPL is expected to maintain its position as a popular option.
TSG found that 60% of BNPL users reported that they intended to continue using this payment method in the future, up from 46% in 2021. Generally, the impression of BNPL apps seems to have gained favorability among consumers, even though 48% of users noted that their usage of credit cards had not changed since they began using BNPL.
The average reported spend by consumers using BNPL services remained largely the same in 2022 compared to the previous year at $302 versus $312. However, the percent of consumers who report spending the ‘same’ amount using BNPL as opposed to when they use other payment methods increased in 2022 by 14%.
Discussion around the transparency of BNPL options has led to calls for greater research to understand the influence of short-term installment loans on consumers and whether they are coercive. A key area of study is whether or not BNPL options cause or influence consumer debt.
“Only 29% of consumers indicated they would be able to pay their BNPL plans immediately if needed, 28% were unsure if they could, and 43% indicated they wouldn’t be able to if an immediate need arose, added Drieling.”
Furthermore, 88% of consumers reported never missing a payment on their installment loans. Of those who had missed a payment, 54% reported paying a late fee.
Download TSG’s free 18-page mini-report covering several key findings. The full 59-page eReport is exclusive to subscribers. Subscribers to TSG’s eReports subscription service have access to this content and dozens of other deep dives, industry directories, country and company profiles, and educational primers.
Highlights of Buy Now, Pay Later: An Analysis of Key Trends and Consumer Attitudes Part 2:
- Trends and New Developments
- Key Players: A Global Look
- Recent M&A Activity
- Impact to Consumer Card Usage
- The Future of Buy Now, Pay Later
Companies mentioned in this report include: Affirm, Afterpay, Amazon, American Express, Barclays, Citi, Goldman Sachs, Grab, GreensSky, Handypay, JPMorgan Chase & Co., Klarna, Mastercard, Monzo, Openpay, PayPal, Perpay, Sezzle, SplitIt, Square, Visa, and Zip.