Field Notes: BNPL Updates
In light of worsening personal finances and increasing inflation, consumers are scrutinizing every purchase. As a result, according to a recent study from NPD Group, more than 80 percent of U.S. consumers are planning to make changes to spending over the next three to six months. Shoppers are also turning to more flexible payment options.
For the last several years buy now, pay later offerings have continued to gain popularity as consumers searched for ways to mitigate financial stress leading to nearly every retailer and brand adopting one or more payment options at the checkout.
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Even Amazon offers BNPL with Affirm. The retail giant partnered with Affirm exclusively last year to offer flexible and transparent pay-over-time solutions. Ahead of Prime Day, Affirm announced it will offer zero percent APR for Amazon Prime members from June 28 to July 11 on purchases over $50.
Amid the popularity of BNPL, solution providers are also improving the shopping experience for consumers.
Klarna, for example, is enhancing its app with easy access to digital versions of loyalty cards. The feature supports more than 8,000 loyalty rewards programs worldwide and spans all categories. Notably, the company’s research finds that loyalty programs are quite popular with almost 70 percent of consumers saying loyalty programs influence purchase decisions, still nearly a third say they have avoided signing up because they do not want to carry a physical card.
Klarna’s own rewards program, which launched in September 2020, has gained more than 4 million members in just the U.S. and Australia.
“At Klarna, we want to give consumers the world’s best shopping experience, no matter whether that’s online or on the high street,” said David Fock, chief product officer at Klarna. “After the launch of our revolutionary new Virtual Shopping tool, Klarna is now delving deeper into physical retail, helping consumers save time and money everywhere they shop.”
Meanwhile, PayPal has introduced a new “Pay Monthly” service to give consumers more choice at checkout. This expansion of the company’s BNPL offerings will enable U.S. shoppers to pay over a longer period on purchases of $199 to $10,000 through monthly payments, instead of biweekly payments, with no late fees. Monthly payments are offered over a six- to 24-month period.
The offering speaks to recent findings from Morning Consult State of Banking’s first-quarter 2022 report, which reported that 65 percent of Americans are saving for a big purchase with 79 percent looking to create and maintain a budget.
“How consumers look to pay for larger purchases is evolving and there is a growing demand for flexible payment options with 22 million PayPal customers using our pay later offering this past year,” said Greg Lisiewski, vice president of global pay later products at PayPal. “Pay Monthly builds on our commitment to deliver leading payment solutions that offer customers the choice to ensure checkout matches their needs and budgeting preferences.”
FOR MORE WWD BUSINESS NEWS:
Field Notes: Full Carts and Full Potential
Are Rising Prices Breaking Consumers’ Trust?
Consumer Surveys Reveal Key BNPL Trends in the U.S.
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