Tune in to the Business Beat, below, to learn more about how BNPL is transforming consumer behavior:
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Good morning, Paul!
My, how consumer purchasing behavior is changing at lightning speed. One of those key areas of change: how we as consumers pay for things we purchase. First, it was cash. Then checks came along, then credit cards. Well, there’s another way to purchase and pay for things today as we make our purchases, that’s gaining incredible traction, unthinkable as a concept just a few years ago, it’s buy now pay later, also known by the acronym BNPL.
This is for real. Over the last two years or so, we’ve seen acceptance of BNPL expanding and speeding up as an ever increasing number of big name entrants weighed into the market as solution providers and merchants offering the option to hungry consumers, including PayPal, Visa, and most recently, as rumors have it, even Apple. PayPal’s pay in four plan is presented to consumers within the PayPal checkout flow already at no additional cost to merchants.
So we can see the advantages to the consumer, of course, I mean, they take possession of what they purchase now in most cases, but pay for it later or over time. But what about the merchants? I mean, the idea of selling something without getting paid for it upfront is preposterous, right? Well, how about this?
Based on current rate of adoption of BNPL programs, they’re expected to reach $1 trillion in US volume sales by 2025. And according to data payments buy now pay later tracker and other sources, that trend is being driven by younger consumers. In fact, more than 26% of millennials and already 11% of Fen Z consumers have made at least one purchase using BNP” to finance that purchase.
Okay. So what does all of this mean? Well, here’s the bottom line. This is another example of how consumers are gaining power and demanding more from sources they purchase from. Of course, merchants would rather get all the cash up front, but once one major online marketplace, for example, offers this to consumers and it’s already happened and consumers embrace it, well, it forces the rest of us to have to keep pace and offer it as well in order to gain the favor of those consumers and win their purchases.
I’m Jeff Sloan, founder and CEO of StartupNation.com, and that’s today’s Business Beat, on the Great Voice of the Great Lakes, WJR.
