2022
9
US Buy Now, Pay Later Financing Market Report 2022
2022-03-17T03:03:06+00:00
OX1100209
3695
148920
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Report
en_GB
“The appeal of BNPL is here to stay, although competition will only keep heating up as established companies continue coming to the market with their BNPL offerings. Brands like Amex,…
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  8. US Buy Now, Pay Later Financing Market Report 2022

US Buy Now, Pay Later Financing Market Report 2022

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“The appeal of BNPL is here to stay, although competition will only keep heating up as established companies continue coming to the market with their BNPL offerings. Brands like Amex, PayPal and Goldman Sachs are just some of the new entrants in recent years. Even tech giants like Apple are rumored to be developing their own BNPL solution. Driven by the need to continue growing and find new revenue streams, pure-plays will look to evolve by becoming financial services powerhouses, with product offerings ranging from savings accounts to debit cards, to even crypto capabilities. Whichever iteration of BNPL new entrants decide to come with to the market, those who stand out will be the ones able to own the customer relationship from start to finish, with touchpoints extending across shopping, payments, and banking solutions.”

– Amr Hamdi, Finance Analyst

This report covers the following issues:

  • Consumer usage of BNPL
  • BNPL providers consumers use the most
  • Reasons consumers use BNPL
  • Regrets over using BNPL
  • Attitudes toward BNPL
Collapse All
  1. Overview

    • What you need to know
    • This Report looks at the following areas
    • Definition
    • Market context
    • COVID-19: US context
    • Economic and other assumptions
  2. Executive Summary

    • Top takeaways
    • Gen Z and Millennials are more likely to use pure-play BNPL providers, while older generations prefer financing options through their credit cards
      • Figure 1: Usage of BNPL providers, by generation, 2021
    • Flexibility, not being able to pay in full among top reasons why consumers use BNPL
      • Figure 2: Top 5 reasons for using BNPL, 2021
    • The BNPL opportunity for banks remains strong, but threats only loom if FIs remain passive
      • Figure 3: Willingness to use BNPL solutions offered by banks, by generation, 2021
    • Market overview
      • Figure 4: BNPL outlook, 2022-27
    • Opportunities and challenges
    • FIs can enhance their customers’ financial literacy by communicating about the perils of BNPL with them
    • Seeking growth and differentiation in a saturated market
    • Key consumer insights
    • Super-prime and prime consumers are significantly more likely to use their credit cards’ BNPL solutions
      • Figure 5: Usage of BNPL providers, by self-reported credit score, 2021
    • Minorities are significantly more willing to open a financial account with a BNPL provider
      • Figure 6: Openness to open financial accounts with BNPL providers, by race and ethnicity, 2021
  3. The BNPL Market

    • Over half of consumers have used BNPL services
      • Figure 7: BNPL usage, 2021
    • Millennials are the highest adopters of BNPL
      • Figure 8: BNPL usage, by generation, 2021
    • Not all BNPL providers are the same
      • Figure 9: BNPL models, 2022
      • Figure 10: Zip Pay in 4, 2022
      • Figure 11: Citizens Pay for business, 2022
      • Figure 12: Amex Plan It paid Facebook ad, 2022
      • Figure 13: Jifiti, 2022
  4. Market Factors

    • COVID-19 was the perfect storm for BNPL adoption
      • Figure 14: Usage of BNPL throughout COVID-19, by generation, 2021
    • BNPL providers continue to attract regulatory scrutiny
    • Equifax set to add Pay in 4 BNPL plans to credit reports
  5. Competitive Strategies and Market Opportunities

    • Klarna continues its foray into sports amid partnership with the Chicago Bulls
      • Figure 15: Sports followed, by generation, 2021
    • Affirm is the latest to throw its hat in the super app ring
      • Figure 16: Alipay app, 2022
    • Tripment Health partners with Walnut to provide healthcare patients with a BNPL solution
      • Figure 17: Interest in using BNPL for products and services, by financial situation, 2021
      • Figure 18: Uninsured rate, by financial situation, 2021
    • Consumers would benefit from a financial management app dedicated to their BNPL loans
    • Millennials are the most interested in BNPL solutions for home improvement
      • Figure 19: Interest in using BNPL for products and services, by generation, 2021
  6. The BNPL Consumer: Fast Facts

  7. Usage of BNPL Providers

    • Pay in 4, credit card financing among the most used BNPL solutions
      • Figure 20: Usage of BNPL providers, 2021
    • Gen Z and Millennials are more likely to use pure-play BNPL providers, while older generations prefer financing options through their credit cards
      • Figure 21: Usage of BNPL providers, by generation, 2021
    • Pure-play BNPL providers are most popular with Black and Hispanic adults
      • Figure 22: Usage of BNPL providers, by race and ethnicity, 2021
  8. Reasons for using BNPL

    • Flexibility, not being able to pay in full among top reasons why consumers use BNPL
      • Figure 23: Top 5 reasons for using BNPL, 2021
    • Over 60% of those financially struggling use BNPL because they cannot pay for purchases in full
      • Figure 24: Reasons for using BNPL, by financial situation, 2021
  9. Average Purchase Price through BNPL

    • Consumers are open to using BNPL again for a variety of price points
      • Figure 25: Average purchase price consumers would use BNPL for, 2021
    • Over 40% of Boomers open to using BNPL for purchases over $1,000
      • Figure 26: Average purchase price consumers would use BNPL for, by generation, 2021
  10. Interest in BNPL

    • Consumer interest in BNPL for travel opens new opportunities for brands
      • Figure 27: Interest in using BNPL for products and services, 2021
      • Figure 28: Klarna travel paid facebook ad, 2021
  11. Regrets over Using BNPL

    • Over 30% have regretted financing a purchase using BNPL
      • Figure 29: Regret using BNPL, by generation, 2021
    • Financially healthy consumers regret using BNPL the most
      • Figure 30: Regret using BNPL, by financial situation, 2021
  12. Reasons for Regretting Using BNPL

    • Unnecessary spending and interest fees among the top reasons nearly 40% regret using BNPL
      • Figure 31: Reasons for regretting using BNPL, 2021
      • Figure 32: Reasons for regretting using BNPL, by age, 2021
  13. Attitudes toward BNPL

    • For 56% of consumers, pure-play BNPL providers are trusted more than banks and credit card issuers
      • Figure 33: Attitudes toward BNPL vs credit cards, by generation, 2021
      • Figure 34: Attitudes toward BNPL vs credit cards, by income, 2021
    • With 65% more likely to shop at retailers offering BNPL, forging key partnerships remains as important as ever
      • Figure 35: Likelihood of shopping at retailers that offer BNPL, by generation, 2021
    • Nearly 60% of low-income households have overspent because of BNPL
      • Figure 36: Attitudes toward BNPL delinquency, by income, 2021
  14. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Marketing creative
    • Abbreviations and terms
    • Abbreviations

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