28% of BNPL Applicants Motivated by No Interest Rate

woman with tablet

For buy now, pay later (BNPL) applicants, PYMNTS Intelligence finds, interest rates are a key concern.

By the Numbers

The 2023 PYMNTS Intelligence report “The Credit Accessibility Series: BNPL’s Wide-Ranging Impact on Consumers and Merchants” drew on a survey of more than 3,100 consumers to understand the increasing prevalence of BNPL products as a credit option, as well as to dig into consumers’ reasons for choosing to use it and the potential of BNPL to improve their credit profiles.

graphic, BNPL

Perhaps unsurprisingly, the results revealed that among those who used BNPL or who had applied but were denied in the previous year, the most common reason for applying was to help with cash flow management.

Yet a significant share of applicants turned to the technology because it offered them a way to pay in installments without racking up interest. Twenty-eight percent said they applied for BNPL because it had a low interest rate or no interest, and 11% cited this as the most important reason they applied.

The Data in Context

Shoppers demand flexible payment options at checkout, as Drew Olson, senior director at Google Pay, told PYMNTS CEO Karen Webster in a December interview.

“Whatever calculus the user performs to determine the payment methods that they want to use, they want more options across more merchants,” he said.

Consumers turn to the technology for a wide variety of reasons and use cases, the PYMNTS Intelligence study found, ranging from overarching concerns for their credit score to sudden financial emergencies.

“Whether you have customers who are using BNPL because they need to or because they are using it for budgeting, there are multiple ways to use it, and that’s why BNPL is so successful and why it’s here to stay,” Sezzle CEO Charlie Youakim told PYMNTS’ Karen Webster in an August interview.