Is 2021 the Year of BNPL? 6 Facts You Need to Know About This Payment Method
Buy Now, Pay Later Boosts Profits and Here’s Proof
Payment options for customers hasn’t really changed for a very long time. Credit card, debit cards and maybe PayPal come to mind, but that’s about it.
Then came buy now, pay later (BNPL), an innovate idea that allows customers to split purchases into four equal, interest-free payments without a credit check.
The result? Thanks to BNPL, people are buying and spending more.
BNPL is growing fast!
- 25% of U.S. merchants already offer BNPL with 46% saying they will likely offer it within the next year.
- During the pandemic, BNPL growth increased by 300% to 400% in 2020 accounting for $15 billion financed purchases.
- 60% of shoppers say they are likely to use BNPL financing in the next six to 12 months.
Zip now offers BNPL in Canada
- The first mover advantage is RIGHT NOW! Among merchants who accept BNPL in countries where it’s been around longer, half have had BNPL for at least one year with 20% having it for two years or more. The rest have started in just the last year!
- In Australia, BNPL already makes up 20% of all online sales and continues to grow. But ask yourself, what Canadian retailers currently offer BNPL?
- Global management consulting firm McKinsey & Company projects BNPL will make up $90 billion a year in financed sales by 2023 and generate $4-$6 billion in revenues.
Why is BNPL boosting bottom lines?
Debt, especially with financially aware millennials, is becoming more of a dirty word every day. It’s the reason young shoppers are embracing the purchasing power of four equal, interest-free payments. Those $200 shoes look way more affordable as $50 x 4 spread over 6 weeks.
Statistically speaking, retailers have experienced:
- 15% increase in cart totals
- 15% increase in conversions
- 14% boost in revenue
- 13% growth in new customers
- 13% improvement in repeat purchases
And remember, BNPL is just getting started! At Zip, merchants have seen even more growth thanks to BNPL such as a 20% increase in topline sales, 60% increase in average order values, and 80% increase in repeat customer rate.