More than Half of Americans Turn to Buy Now, Pay Later During Financially Stressful Times
June 26 2024 - 9:29AM
Business Wire
- 4 in 5 ‘Buy Now, Pay Later’ customers confirm Pay-in-Four
innovation helped reduce their financial stress throughout the
payment cycle
- More than 75% of Afterpay customers say that ‘Buy Now, Pay
Later’ reduces their financial stress at the time of purchase, and
throughout the installments journey
Afterpay, a leader in Buy Now, Pay Later (BNPL), has conducted
research with Morning Consult revealing Americans are more
financially stressed today than a year ago, with more than half
(51%) of Americans feeling financially squeezed. As a result, BNPL
was considered by 4 in 5 users as an effective solution to
alleviating financial stress, especially among Millennials and Gen
Zs who are preparing for a pivotal or large life change this
summer.
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(Graphic: Afterpay)
As demonstrated by the survey, U.S. consumers not only believe
that BNPL can help reduce financial stress throughout the payments
journey, but results proved it does. 82% of BNPL consumers surveyed
said that traditional Pay-in-4 models reduce their financial stress
at checkout, and 77% and 78%, respectively, indicated the same
sentiment after 2 payments and when the payment journey is
complete. Among Afterpay users, the results are even higher – 86%
said BNPL reduces stress at the time of purchase, 80% indicated the
same sentiment after 2 payments, and 76% when the payment journey
is over.
As Americans head into the summertime, many see the potential of
BNPL as a solution to combat their feelings of financial insecurity
for major life events. According to the survey, the highest impact
areas of BNPL consideration include weddings (61%), large household
purchases (61%), back to school shopping (53%), and preparing to
buy a home (51%).
Many American consumers are feeling the effects of inflation,
attributing it to a heightened state of financial stress. Customers
who use Afterpay’s Pay-in-4 BNPL benefit from managing their
budgets with the flexibility and choice of either breaking out
their purchases over four installments or paying the entire
purchase off at any time – all while incurring zero costs from
Afterpay if installments are paid on time. As of the first quarter
of 2024, 98% of Afterpay Pay-in-4 purchases did not incur late
fees, and 95% of installments were paid on time, consistent with
prior periods.
Afterpay continues to invest in consumer protections to help
customers limit their risk. Unlike a credit card, Afterpay starts
customers with a low limit, pauses accounts if a customer has
missed a repayment, and caps late fees. Among the BNPL brands
listed in the survey, Afterpay was tied for first as the most
commonly considered as well as the most trusted brand.
Methodology
Morning Consult’s Afterpay Financial Sentiment Survey (May 2024)
was conducted between April 26 - 30, 2024 among 2207 adults aged
18-55 in the U.S. All interviews were conducted online. Results
from the full survey have a margin of error of +/- 2%, and the
margin of error among subgroups is greater. All subgroups
highlighted in reporting have a base N size of 100 or more unless
otherwise stated.
About Afterpay
Afterpay is transforming the way we pay by allowing customers to
buy products immediately and pay over time - enabling simple,
transparent and responsible spending. We are on a mission to power
an economy in which everyone wins. Afterpay is offered by thousands
of the world’s favorite retailers and used by millions of active
global customers. Afterpay is currently available in Australia,
Canada, New Zealand, the United States and the United Kingdom,
where it is known as Clearpay. Afterpay is a wholly owned
subsidiary of Block, Inc. (NYSE: SQ).
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