Buy Now, Pay Later payment services are on a heater in 2023, with the technology expected to grow at a 24.3% annual compound rate through the end of the decade, according to Research and Markets. By 2030, the BNPL market will reach $9.2 billion, Research and Markets reported.
That figure could grow even more abundant as consumers expand their options with BNPL, even adding pricey “milestone” purchases as a spending option.
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Consumers Turn to BNPL for Lifestyle Purchases
That’s the take from a new study by Citizens Pay, a BNPL consumer financing platform for retailers. The company says that consumers are increasingly turning to BNPL for bigger lifestyle purchases like marriage, college, and even home purchases.
“From hiring a favorite wedding band to buying a home in the ideal location, Americans want milestones to be special,” Citizens Pay reported. “Among those who are married or plan to marry in the next decade, 82% wish they had the financial flexibility to afford wedding-related extras. Meanwhile, 97% of those planning to buy a home say they want the flexibility to afford better features related to the purchase. Of those, 66% prefer a more desirable location, 51% better furniture, 47% more square footage, 43% smart home electronics, and 42% high-end appliances.”
That’s where BNPL checks in.
About 35% of the 2,000 people surveyed by Citizens Pay “know very little about BNPL services” yet are open to the idea of spending more cash using BNPL services.
“Of those who haven’t used it in the past year for purchases of $500 or more, 52% say they’re somewhat comfortable with the idea, while 20% are completely or mostly comfortable,” the report noted. Even Americans those who haven’t leveraged BNPL payments in the past year say they’re open to spending more money using BNPL payment platforms. “46% are very or somewhat likely to consider spending $500 or more, even as doing so as (consumer) prices rise,” the study stated.
More Big Ticket Items
The more that U.S. consumers use BNPL to buy products and services, the more likely they are to desire “big ticket” items.
“For example, 87% of parents or expectant parents who’ve used BNPL before are more likely to want more extras for their kids,” Citizens Pay noted. “Furthermore, individuals who use BNPL once are more likely to use it multiple times; 61% of those who used BNPL services for purchases of $500-plus in the past year have an average of two BNPL loans.”
There’s no guarantee that consumers will emerge unscathed and debt free from a sustained BNPL bug purchase party. If the economy turns south, as many economists expect, Americans who use BNPL to finance their cars, weddings, and homes may wish they weren’t so inclined to use digital payment platforms as their own personal piggy bank.
