Dec. 1, 2023 | BNPL 5 Common BNPL Myths Busted this Cyber Monday


Buy Now, Pay Later (BNPL) usage is at an all-time high, and the stats from Black Friday and Cyber Monday tell a compelling story of its staggering growth. This Cyber Monday, Adobe Analytics found that $950 million in BNPL spend happening on November 27th alone, 43 percent higher than the year before. In fact, $8.3 billion in total holiday spending this year have been driven by BNPL platforms. And this is only considering 3rd-party BNPL solutions.  

Meanwhile, equipifi’s Bank BNPL data reflects similar increases in usage. In the month of November, we saw consumers turn to their home banking to split payments on purchases more than twice as often as they did in prior months – a trend that is expected to continue through the holiday season.   

So, let’s look back at 2023 and see which BNPL myths have been busted. 

Myth 1: BNPL is a fad and won’t see any uptake 

BNPL is expected to see 25 percent compounded annual growth between 2022 and 2026. Today, 40 percent of shoppers are using BNPL at least once a month and third-party BNPL providers like Affirm are seeing 91 percent of its transactions from return users. equipifi's aggregate Bank BNPL data shows similar trends, where repeat borrowers continue to grow month over month, and across all generations. User trend consistently shows that when BNPL is an option, uptake occurs. Consumer expectations have positioned this payment method not only as a must-have in the shopping experience, but also as an embedded payment, budgeting, and banking experience.  

Myth 2: BNPL is something only Gen Z and Millennials use  

BNPL is known for being a preferred payment option for next gen consumers. It’s true that Millennials make up the largest user segment both for 3rd-party BNPL and Bank BNPL, however, there is a growing number of net new users and repeat users across all generations. It is likely that the variation in BNPL usage is more indicative of how each generation relates to debt rather than an inclination or resistance toward it. PYMNTS research found that while Baby Boomers use BNPL less frequently, when they do it is for larger spending. Meanwhile, Gen X is just as frequent users of BNPL as Millennials and is the demographic segment that sees the highest repeat usage of Bank BNPL. 

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Myth 3: BNPL is only used when consumers are under financial duress 

Did you know that households with income levels over $100K are more likely to be moderate to heavy 3rd-party BNPL users? This is also the case for Bank BNPL. Today, consumers are no longer just using BNPL when they need to stretch budgets, they are increasingly using it to bring everyday flexibility to their personal budget. Bank BNPL, with the financial institutions’ ability consider account data more holistically, takes this a step further, and provides offers to consumers that align with their financial health. In this way, Bank BNPL positions the financial institution at every important financial moment for debit cardholders. 

Myth 4: BNPL puts more financial stress on the borrower than traditional credit products  

Today, consumers are choosing BNPL over credit cards to ease financial stress. While both products provide financial flexibility, JD Power found that 33 percent of consumers cited this as a reason to use BNPL and only 6 percent said the same for credit cards. The same report found that consumers prefer BNPL over credit cards to manage the propensity to overspend.   

Myth 5: BNPL sees high delinquency rate relative to other credit and loan products 

Even as BNPL usage continues to grow in volume, 3rd-party BNPL such as Affirm see delinquency rates that are performing better than major credit card issuers today. This is even more so the case with Bank BNPL, where the consumer’s ability to repay is incorporated in each offer presented.   

Consumer data has spoken: BNPL is here to stay as a permanent tool for financial flexibility, and they will use it from the most clear, convenient, reasonable, and trusted source. Once they use it, they are highly likely to use it again and become frequent users and are even ready to take on additional commercial and financial products from their BNPL provider. So if you’re a financial institution who is ready to leverage Bank BNPL, now is the time to get started. 

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