In recent years, consumers have preferred shopping online and are doing so more frequently. With prices on the rise, more shoppers have turned to Buy Now, Pay Later (BNPL) for both essential and non-essential purchases - due to its ability to break down single purchases into smaller payments. In fact, 60 percent of online shoppers have used BNPL since the pandemic.
But with shopping events come large purchases, and with holiday shopping now over, many consumers could soon be feeling the stress of their BNPL payments from offers they accepted across providers. So how can you tell if your cardholders are experiencing BNPL stress? What can you do to help?
BNPL stress happens when shoppers accept offers without visibility into how that impacts their financial health (and this compounds with every additional offer, particularly from multiple providers). It also occurs when there are too many apps to download, too many loans to keep track of, and too many accounts to connect to that the management stress becomes overwhelming.
Depending on how many BNPL plans your cardholders created during this shopping season, some of them may soon experience missed payments and insufficient account balances, negatively impacting their financial health. In many cases, the pain of missed payments will also negatively impact the cardholder’s experience with you, their financial institution.
Whatever the reason, banks and credit unions should take note, especially as cardholders are now experiencing financial stresses outside of their immediate relationship with their primary financial institutions.
The good news is you can prepare for this BNPL stress and support your cardholders to navigate their financial journey. Here are some signs that your cardholders are experiencing BNPL stress, and what you can do about it.
Understanding these five account behaviors will help financial institutions equip their cardholders to tackle their BNPL stress - allowing them to take steps toward a healthier financial future and make wiser choices surrounding their use of BNPL.
BNPL isn’t going anywhere, but your cardholders may be. They could be turning toward fintechs that offer short term stress free BNPL in exchange for long term financial pressure. Understanding how to recognize BNPL usage and the potential challenges related to this change in spending patterns, is key to providing relief and prevention by offering alternative solutions that give your cardholder peace of mind, greater financial health, and the budget flexibility they are seeking.
And the best way to protect your cardholders’ financial health? A BNPL solution from you that is already integrated into their banking experience and takes their financial health into account when generating offers. Learn more about what this can look like for you.