Buy now pay later trends are evolving fast. This is because the sector has experienced exponential growth over the last year. In fact, Adobe found the sector experienced 215% year-over-year growth in the first two months of 2021. Moreover, Square’s recent acquisition of BNPL giant Afterpay for $29 billion is expected to further propel the growth of the sector.
But, what buy now pay later trends are expected to drive the growth of the sector for the rest of 2021 and into 2022? Payflex highlights some of the most notable trends below.
Younger Shoppers Will Continue To Move Away From Credit
One of the most notable buy now pay later trends anticipated to propel the sector forward is that younger shoppers will continue to move away from credit. eMarketer confirms this, finding nearly 75% of BNPL users are Generation Z or millennials. Gen Z and millennials came of age during the 2008 financial crisis. This has made them more cautious about debt and hidden fees than previous generations. This credit wariness and desire to avoid accruing high levels of debt is expected to further drive the adoption of alternative payments.
Younger shoppers drawn to interest-free alternatives
Interest-free is perhaps one of the most important buy now pay later trends. Younger shoppers are drawn to the fact that BNPL empowers them to budget. They have the flexibility to pay over longer periods, and know exactly how much they need to pay over a certain period. A PYMNTS.com and PayPal study reinforces this, finding that BNPL users tend to be budget-conscious and financially responsible. The study found that they want to stay within their means and not blindly put charges on their credit cards or accept unclear financing terms.
Social commerce becomes a major player
Gone are the days where social media was simply a place to catch up with friends. Shopping via social media has become a crucial part of the online shopping process. In fact, it is expected to account for $84 billion in US retail sales by 2024. In addition, 40% of U.S. millennial and Gen Z consumers already using social to shop. Similar figures found one in three global shoppers have made a purchase on social media in the past year. BNPL will play a central role in connecting retailers to younger shoppers seeking payment flexibility. Especially as shoppers seek payment choice at checkout. This makes social commerce one of the most important buy now pay later trends.
Buy now pay later trends: Looking to the future
Roughly 1.5 billion consumers will spend $995 billion through BNPL by 2026. Therefore, as an eCommerce merchant BNPL is no longer something to ignore. Especially in a highly competitive eCommerce marketplace. As we look to the future, buy now pay later trends will continue to evolve alongside consumer behaviour and preferences. But one thing remains clear: BNPL is here to stay. And will undoubtedly continue shaking up the payments industry for the foreseeable future.