The loss of spending power is taking its toll on how consumers spend their money, which in turns creates new interest from new categories of merchants who see BNPL as a way to make the sale, says Erik Svenson, head of global consumer finance for dental supply company Dentsply Sirona.
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BNPL has a massive variety of use cases, and unusual players are entering the arena. The service is popular for everything from regular grocery shopping to massive, big-ticket items such as jewelry, electronics or luxury goods — and a variety of new industries are entering the fray, including dentistry.
“Our ethos was to really democratize dentistry. We want to make sure it is available to all, and if that’s our ethos, we want to make sure that everyone has access, and that means that we need to make sure that there is a payment mechanism and an option that’s available to all [consumers] across the credit spectrum.”
Ongoing economic challenges have been a concern for both businesses and consumers over the past year. Rising interest rates, inflation and supply chain issues are just some of the factors that have led to a lack of consumer confidence and lowered retail sales.
“Dentistry tends to be a more resilient industry because everyone needs to maintain oral health. So, we’re a little insulated from that, but [dentistry is] still … a considered purchase. So, like everyone, we’re still looking at some of the headwinds from rising interest rates [and so on].”
BNPL services help customers overcome hesitation for purchases. Dividing large payments into more manageable fractions helps consumers fit these purchases into their budgets, and unlike traditional credit options, there is no interest on them.
“With BNPL, they’re able to pay over time. Should they make that full monthly payment, they’ll incur no interest. That appeals both to a financial sense as well as a cash flow sense, and they don’t incur any additional charges so long as they’re paying that monthly piece — and that’s really appealing to customers.”
Being able to spread out these purchases has helped merchants through today’s myriad economic challenges. Merchants have enjoyed higher sales volumes and increased ticket sizes as a result, counteracting the economic uncertainly felt around the world over the past few years.
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