A busy week in BNPL news. Credit Karma research shows 34% of BNPL users fell behind on one or more payments. Meanwhile, a stunning 16 million UK BNPL users don’t think it will get them into debt. Can you spell financial literacy? Interestingly, Sezzle CEO Charlie Youakim said many younger users see buy now pay later as a budgeting tool. He also said Sezzle’s top 10% of users tap into BNPL up to 60 times yearly. Are you listening banks?
Over at Block, BNPL subsidiary Afterpay is getting a refresh and bigger role within the company by CEO Jack Dorsey. Klarna racked up more than 640,000 new users since launching in Canada 18 months earlier, as consumers bought now and paid later in growing numbers.
Bangladesh private bank IPDC introduced monthly installment payments in a new bank app for customers with a monthly salary of more than $184. Saudi discount airline flynas added BNPL payments for airline travelers in partnership with Tabby. IBS profiled four BNPL companies extending financial inclusion in the UAE. Part of the wider world where financial inclusion is not a daily reality for many.
BNPL: A force for good or a step closer to an endless debt spiral?
BNPL is a lightning rod for debate. Convenient and flexible, it can also create a debt spiral for some consumers. While buying essentials like toilet paper and food with installment payments sends a mixed signal, it can be a vehicle for financial inclusion if managed properly. Credit Karma research found 34% of BNPL users fell behind on one or more payments, with 72% saying they believe their credit score declined as a result. Forbes
Financial literacy? Most UK BNPL users don’t think they can lead to debt
A staggering 16 million people in the UK using buy now pay later (BNPL) services are unaware they can get themselves into debt. Creditspring research showed that 31% of users were unaware that BNPL purchases could lead to debt, which increased to 51% in the 18-24 age group. If there were ever a need for financial advice and literacy, this would be yet. Credit Strategy
Sezzle CEO says millennials use BNPL as budgeting tool
PYMNTS research shows students could lose 6.5% of their spending power when loan forgiveness programs end. Younger consumers (including millennials) shifted more of their spending onto cards, indicating the debt service burden will be harder. Sezzle CEO Charlie Youakim said there might be some pullback on spending, but BNPL will likely see increased interest as consumers adjust to their new financial realities. He said Sezzle’s top 10% of customers use BNPL up to 60 times annually. PYMNTS
Block BNPL gets an update from Jack Dorsey
After paying $29 billion to buy Australian BNPL lender Afterpay, Block is ramping up its strategy to connect Afterpay to more operations inside the company. “[Afterpay] is where a lot of my focus is now,” said CEO Jack Dorsey during the payment company’s latest earnings call. “We’re meeting with their team on an almost day-to-day basis.” Block delivered quarterly net revenue of $5.53 billion, up 23%, and EPS of $0.39 per share, up 94%. American Banker
Sally Beauty CEO says BNPL boosts e-commerce sales by 7%
Sally Beauty’s CEO Denise Paulonis said the addition of the Klarna BNPL payment option led to an increase in average order value, sales growth of 7% or $34 million in increased revenue, and the introduction of a new, younger customer demographic to the beauty products platform. PYMNTS
Klarna growth strong in Canada
Klarna rang up 640,000 Canadian BNPL users in the past 18 months. Klarna processed more than two million orders and added new strategic retail partnerships with merchants, including Airbnb and SSENSE. BNPL use grew quickly during Covid and continued as consumers found value in buy now pay later installments. Canadians are distancing themselves from traditional credit and higher-interest products like other consumers. Payments Journal
IPDC EZ app launch features BNPL option in Bangladesh
Bangladesh-based IPDC’s EZ app offers flexible equal monthly installment (EMI) payments ranging from three to twelve months, offering affordability for customers. To qualify, a minimum monthly salary of BDT 20,000 ($184) is required. The app covers various product categories, from electronics to cozy furniture, fashion and lifestyle, gadgets, gold and jewelry. The Business Standard
flynas checks in with Tabby flexible travel payment solutions
Discount Saudi airline flynas checks in with UAE-based Tabby to offer airline customers installment payments for travel. Airline customers can repay travel in four interest-free monthly payments. Research by Oney showed that 28% of tourism consumers plan to use installment payments, partly due to rising travel costs and lower disposable income. The Paypers
4 BNPL platforms delivering financial freedom to UAE consumers
In the UAE, the pandemic changed consumer buying habits and spurred the growth of online shopping. Four BNPL companies are among many increasing financial access for UAE consumers. They include Postpay, Spotii, Tabby, and Tamara. BNPL payments are expected to grow by 22.0% annually to reach $2.53.billion in 2023 and double in size to exceed $4.5 billion by 2028. IBS Intelligence
Recent BNPL Report news:
75+ newest BNPL research stats from around the world