The retail world is rapidly evolving. This is largely because of the increasing popularity of 'Buy Now, Pay Later' services—or BNPL for short.
BNPL is changing how consumers shop and manage money, transforming the market. As we begin to progress through 2024, recent statistics indicate a significant surge in BNPL adoption in Canada. Predictions show a growth of 51.6% annually, with payments totaling over $2.1 billion in 2023.
By 2028, experts expect them to reach $8.3 billion. This dramatic shift raises a crucial question for every business: are you equipped to embrace this evolution?
Understanding ‘Buy Now, Pay Later’
'Buy Now, Pay Later' lets customers with financial limitations buy products with spread-out monthly payments, making purchases easier to afford. It also makes it easier for customers to balance and manage money with fewer concessions.
The rapid growth of BNPL closely ties to the growth of online shopping over the past three years. As online shopping continues to expand, experts expect the prominence of BNPL options to rise in tandem.
Who Uses ‘Buy Now, Pay Later’?
360 million people worldwide are currently using BNPL services. Prominently, it’s quickly becoming a standard among younger shoppers.
According to The Motley Fool, 18-34-year-olds are three times more likely to use BNPL regularly than consumers older than 55. What's more, Forbes says BNPL usage has grown 600% among Gen Z since 2019 and more than tripled among Millennials.
Some experts anticipate that by 2025, almost half of all Gen Z will use BNPL, while Millennial use will surpass 40%.
By 2025, Gen X is projected to surpass 30%, indicating a larger shift.
Could BNPL become the primary payment method? It's plausible, considering recent stats that suggest more than half of all consumers (56%) indicate that they prefer BNPL to credit cards--in contrast to the 25% who say they prefer credit cards.
Businesses Need to Adapt
Research indicates that a growing number of Canadian businesses are learning about and utilizing BNPL services. Overall, roughly 34% are aware of them, and 8% have begun using them. BNPL transactions now represent about 6% of all payment methods, doubling their share within just one year.
Businesses that adapt and adjust to meet the always-evolving needs of customers will experience increased sales. Why? On average, consumers who use BNPL purchase about four items and use the payment option monthly. This suggests that the total amount spent and loyalty increase when a viable BNPL option exists.
Ultimately, as usage expands, adding ‘Buy Now Pay Later’ options into your business won’t be a matter of competitive advantage—it will be an expectation on your customers’ part, capable of making or breaking a sale.
Send Your Customers Home Happy
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