With the busy holiday season just around the corner, Target is pulling out all stops to keep customers happy and spending more. 

With credit card use dropping, particularly with Millennials and Gen Z, Target announced on Oct. 6, 2021 that it will now offer buy now, pay later (BNPL) with not one, but two major consumer financing providers: Affirm and Sezzle. 

The announcement comes on the heels of Amazon U.S. and Canada adding BNPL back in September and is considered a major move in the fast-growing BNPL space. Target is one of the first major retailers to offer multiple providers proving that not only is demand for BNPL rapidly growing, but that having several BNPL options could become as critical as accepting all major credit card. 

Consumer financing is changing before our very eyes because interest-free, installment plans are attractive to consumers who have been saddled with or are weary of credit card debt. New credit card applications have been on the decline for years and interest in store-branded credit cards plunged in 2021 according to a report by Lending Tree.

BNPL is also rendering traditional layaway plans obsolete, with Walmart removing seasonal layaway from most of its store last year. Other retailers who never offered layaway due to the complexity and operational costs are also turning to BNPL to provide “layaway” except consumers gets to take their purchase home right away.

By offering BNPL, retailers are experiencing a boost in sales by giving customers, who may not have cash right away, the buying power to spread their purchases out over time at no additional cost. It also gives consumers financing that’s more on their terms and Target’s decision is proof that BNPL is redefining what it means to shop with “credit.”