Dive Brief:
- The holidays are creating interest around buy now, pay later options, with 28% of seasonal shoppers highly likely to use BNPL, according to a study from Splitit and Pymnts. Sixty-seven percent of parents intend to use BNPL options to finance the holidays this year.
- Clothing and accessories will make up nearly 60% of pay later gift purchases this season, according to the survey of over 5,200 respondents. Shoppers also want to finance luxury purchases with credit card installments, including furniture, electronics and vehicles.
- Nearly 40% of consumers plan to use BNPL for self-gifting during the holidays. Additionally, 38% of millennials said they would use buy now, pay later options more frequently during the season than they typically do throughout the year.
Dive Insight:
Consumers are turning to installment plans this holiday season, according to the Splitit and Pymnts survey. The top reason for using BNPL is so shoppers can better manage their finances. Nearly half (49%) of parents are using the option to minimize the guilt of indulging in pricey purchases by dividing the costs over time.
Other research suggests that shoppers have leaned on installment payments to stretch their budgets. A spring survey from Bankrate and YouGov found that half of BNPL users did so to spread out their cash flow, while 37% used it to take advantage of low or no interest rates.
“Though we see a strong interest in shoppers buying for themselves using pay later plans this holiday, nearly two-thirds of consumers also plan to use flexible payment options for gifting,” Nandan Sheth, CEO of Splitit, said in a statement. “This season also presents an opportunity for merchants to acquire new customers, as 43% of consumers interested in using pay later plans value it enough to influence where they shop.”
Last year’s holiday season brought a boost in BNPL transactions. Adobe Analytics found that online BNPL purchases rose 14% year over year to $16.6 billion in the 2023 holiday season, a record for the payment method.
Following the growth of buy now, pay later services last year, Affirm this fall updated its mobile app with new features designed to drive sales for its merchant partners.
