During the 2023 holiday season, Americans made more than $17 billion in purchases using a “buy now, pay later” option. Vivek Pandya, lead analyst at Adobe Digital Insights, joined with TheStreet to discuss why “buy now, pay later” purchases are becoming more and more popular, as well as what kinds of items consumers are buying with BNPL.
Full Video Transcript Below:
J.D. DURKIN: So lately we’ve seen purchases using ‘buy now pay later’ skyrocket. It’s very popular to use that method of payment. What’s behind the surge?
VIVEK PANDYA: Well, there’s a couple of different reasons we’re seeing the uptick. So ‘buy now, pay later’ over the holiday season, we saw about $17 billion in spend, and that’s almost $75 billion through the year. And it’s really being driven by consumers being in a more strained financial position and then seeing a sort of interest free way to buy goods, especially for things like the holiday season. And then being enticed to do it. And we’re also seeing integrations across a lot of different mobile apps, a lot of different retail endpoints in order to support ‘buy now, pay later,’ especially at a time where consumers are looking to, you know, buy different things, buy higher ticket items, but then have it broken up into installment payments.
J.D. DURKIN: And which categories are seeing the biggest increase in ‘buy now. pay later’ purchases? Are you seeing kind of similar trends as people use that?
VIVEK PANDYA: Surprisingly enough, we’ve seen upticks across categories like electronics and apparel, but also grocery. So a lot of upticks on the bigger ticket items. And when you think about things like grocery, those prices are continuing to tick up, even though the growth of those price increases have slowed quite a bit. We’re still seeing food prices be quite elevated. And then when consumers buy groceries online, they’re really trying to get efficiency out of shipping and things like that. So then all of a sudden the grocery order can get up to about $500 as much as that. So then all of a sudden they start leaning on ‘buy now, pay later.’