It’s official: Buy Now Pay Later (BNPL) is not just having a moment—it’s having a full-on movement. The latest figures from Adobe show that on Cyber Monday (27 November 2023), BNPL didn’t just climb—it soared from $356 million in 2021 to a staggering $940 million in 2023. BNPL usage reached records level on Cyber Monday, growing 42.5% to $940M over 2022.
We’re witnessing not just an upward trend but a new consumer reflex.
So what is BNPL?
It’s the new button next to your shopping cart that lets you take home your latest find without forking over the full amount right away. Simply put: payment by instalments. And people are taking to it like ducks to water. It’s about instant satisfaction—getting your hands on something shiny today while pushing the actual pain of payment down the road.
In the United States, BNPL options like Afterpay, Klarna, and Affirm are leading the charge, becoming household names as they partner with both colossal retailers and boutique shops. Klarna boasts over 150 million global active users and 2 million transactions per day. In the Asia-Pacific region alone, platforms such as Hoolah, Atome, and Zip Pay are gaining momentum, riding the wave of e-commerce growth, where BNPL payments is expected to grow by 20.4% on an annual basis to reach US$198.2 billion by the end of 2023.
Retailers are savvy to this. They know that when you offer someone a chance to delay payment, they tend to buy more. It’s the psychological cushion of ‘later’ that makes adding one more item to the basket that much easier. And let’s be real, on days like Cyber Monday, when the digital aisles are packed, this can make all the difference.
BNPL And Retailers’ CX Strategies
The escalating popularity of BNPL is not just influencing consumer spending habits; it is compelling retailers to rethink their CX strategies and offerings. No doubt, the ethos is clear: flexibility and choice are paramount. One size (or a few sizes for the matter) doesn’t fit all when it comes to paying for purchases.
Retailers are now partnering with a variety of BNPL providers, offering an array of payment plans to cater to different consumer needs. This approach to payment customisation is crucial as it elevates the online shopping experience, making it increasingly tailored to individual preferences.
On the other hand, this trend brings with it a significant responsibility. The success of BNPL is deeply rooted in consumer trust, predicated on the clarity and fairness of these platforms. Retailers must ensure that their BNPL offerings are communicated with utmost transparency, allowing customers to make informed decisions without any hidden caveats. This clarity not only builds trust but also reinforces a positive customer experience.
As a result, BNPL is quickly transitioning from being an alternative payment method to an essential component of customer service strategy. It affords consumers the autonomy to dictate their own terms of purchase, which in turn fosters a sense of agency and loyalty towards the retailer.
Retailers who have successfully integrated BNPL into their checkout processes have observed not just an uptick in sales but also an enhancement in overall customer satisfaction.
A Transformative Force That Reshapes Consumer Habits
In essence, the surge in BNPL’s popularity is not just a passing trend in e-commerce. It reflects a broader societal shift towards immediate accessibility and payment flexibility. Retailers must recognise that embracing BNPL is not merely about keeping pace with competitors but is integral to delivering a contemporary and responsive shopping experience.
As we progress, BNPL is set to redefine the commerce landscape, making itself an indispensable part of the online customer journey.