Buy Now Pay Later

Why Installment Payments Are Fashionable This Holiday Season

Consumers — especially millennials and Generation Z — are looking for new commerce experiences during the 2019 holiday season. However, they are also hesitant to pay for those new experiences with credit cards or other traditional financing options. Debt from the previous holiday shopping season has made these younger consumers credit-shy, but it has not limited their appetite for holiday spending. Retailers must accommodate financial flexibility, which is leading many to explore alternative solutions — such as Buy Now, Pay Later (BNPL) solutions.

In the inaugural Buy Now, Pay Later Tracker, PYMNTS explores the potential impact that BNPL could have on the retail world, especially during the 2019 holiday season. The Tracker also explores how the payment preferences of younger generations — such as bridge millennials, millennials and Gen Z — may be well-suited for utilizing BNPL.

Around The Buy Now, Pay Later World

Retailers worldwide are exploring the impact of BNPL solutions, especially in Australia, where the payment method is proving particularly popular. Thrift clothing store The Reject Shop has teamed up with BNPL solution provider Afterpay to bring this alternative payment method to its customers just before the 2019 holidays. Customers can use the solution to pay a quarter of their purchases’ total price, before paying off the rest in three additional installments.

Other retail brands, such as technology company Apple, are also exploring the potential benefits of BNPL. The company is offering customers the ability to use BNPL to pay for their new iPhones in three payment installments, so long as they use their Apple credit cards. Customers will receive the same cash-back rate — 3 percent — as they do on regular purchases when paying for the phones with this card.

Consumers are predicted to spend more than ever during the 2019 holiday season, but they are also exhibiting more financial strain. Forty-eight million Americans are still paying off debts from the 2018 holiday season, according to one recent study. An additional 30 percent of Americans — which works out to approximately 66 million Americans — plan to spend less on gifts during this season. Retailers will thus have to explore payment methods carefully, as financial stresses may keep customers from reaching for their credit cards.

To learn more, visit the Tracker’s News & Trends section.

How BNPL Solutions Can Help Cut Through The Holiday Buzz

Consumers are on track to spend about $149 billion via online purchases this holiday season. Retailers will need to entice customers to their platforms over others, but that can be difficult as competition during the holiday season heats up. That is why retailers would be wise to consider how consumers want to pay, and whether alternative payment methods such as BNPL could help alleviate their holiday financial stresses, according to Nick Kaplan, president of plus-size fashion brand Fashion To Figure.

In the Tracker’s feature story, Kaplan discusses how retailers can offer flexible payment offerings without overburdening consumers.

How Bridge Millennials Are Driving More Demand For Flexible Payments

Many retailers are tracking millennials’ wants and needs, but there may be another generation having an even greater impact: the bridge millennials. This 30- to 40-year-old consumer group straddles the line between millennials and Generation X, and they have established spending power and unique shopping needs that make them dangerous for retailers to ignore. Retailers that do not offer payment options that are carefully tailored to this generation’s needs may find themselves missing out on a highly influential group of shoppers.

To learn more about bridge millennials and their unique payment needs, visit the Tracker’s Deep Dive.

About The Tracker

The Buy Now, Pay Later Tracker, a PYMNTS and Afterpay collaboration, brings the latest news and research on demand for flexible payment solutions in the retail space. It features expert analysis regarding the changing payment trends, and highlights the insights from top insiders within the retail and fashion industries.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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