The Pandemic Accelerated America’s Embrace of Digital Payments. Now What?

By Spencer Cain

Buy now, pay later (BNPL) and alternative payment options are literally changing the financial landscape the way streaming did to cable. In this video, Zip CEO Larry Diamond talks about this revolution and how retailers can leverage it to grow their brands.

In case you’re short on time, we’ve pulled out Diamond’s highlights below so you’ll understand when we said what “streaming did to cable,” we meant it.

COVID-19 fundamentally changed how people shop.

  • In 2020 there was a 46% YoY increase in online sales – that’s 3x the annual growth in the last 10 years. 
  • Buy online, pick up in store jumped 44% (it was 6.9% pre-covid). 
  • Consumers are now embracing these new habits in re-opening and retailers who adapt to these behavioral shifts will have a competitive advantage. 

To grow, your product must be part of the “Experience.” 

  • Here’s a few examples: Clothing retailer SHEIN turns around and ships TikTok trends within 4 days. Amazon constantly evolves its processes with customer feedback, while Peloton rose to success by bringing fitness into the home. 
  • Zip achieves this by listening to customers about when and how they want to pay and what they want to pay with. Buy now, play later (BNPL) combined with the Zip app is just one way we embrace the experience.

“Being debt free” is what millennials want.

  • 60% of millennials said “being debt free” represented financial success. Only 20% said “being rich.” BNPL fits this trend by allowing you to pay for purchases in four equal, interests-free payments! 
  • Fear of debt is a major reason millennial aren’t signing up for credit cards as they opt for things like BNPL – the average age of a credit card holder is 50. 
  • U.S. ecommerce sites have a 96% cart abandonment rate, with 30% leaving their carts if their preferred method of payment isn’t available. BNPL not only makes the decision to spend easier, it’s quickly becoming the way to pay.

Buy now, pay later is the future 

  • Though still new, 20% of all online sales in Australia already go through BNPL. In the U.S. it’s only 2% because at many retailers, it’s not even an option.
  • BNPL adoption accelerated during the pandemic growing at 300 to 400% in 2020. By 2024, U.S. ecommerce will exceed $1.8 trillion. If we use Australia’s example, what’s 20% of that? $400 billion. 
  • When people compare BNPL’s four equal, interest-free payments vs. a 25% credit card rate, BNPL just makes financial sense and cents.

Grow your business with BNPL and Zip now

About the author
Spencer Cain

Spencer Cain is a fashion and entertainment editor with a background in ecommerce and trend forecasting. His work has appeared in numerous publications including Us Weekly and StyleCaster, and he spent six years leading US content for ASOS. He believes that online shopping should be an Olympic sport.