Council Post: Buy Now, Pay Later Providers Should Do Their Part To Promote Responsible Spending

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CEO and Co-Founder of sunbitA technology company creating a stress-free shopping and selling experience for everyone, everywhere.

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Buying Now, Pay Later (BNPL) providers have a tough time for many.

As the number of providers has grown, there have been concerns about the risks associated with such payment options, with many people using them for “wants” rather than “needs” – such as “needs”, ultimately racking up unnecessary debt. .

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This does not bode well for anyone including the BNPL providers themselves. must have a collective mission helping out Consumers manage their finances and stress, not to hurt or take advantage of them in any way.

In the context of this challenging industry, we decided to run a survey to understand how consumers are feeling about BNPL in the current economic climate, in order to best meet their needs. We partnered with The Harris Poll to conduct an online survey of more than 2,000 American adults in early April. About 73% were at least somewhat familiar with the BNPL, suggesting strong awareness.

As far as results are concerned, the good news is that across all consumer groups, people feel positive towards BNPL and want these payment options to be available for wider purchases. Beyond the survey results, however, it is important for consumers and BNPL players to encourage the responsible use of flexible financing and ensure that the industry develops with people’s needs for the benefit of all.

Consumers want BNPL

What was heard clear and clear: People want BNPLs for things that aren’t really optional—like fixing their car, dentistry, and eye care.

In the survey, 69% of US consumer respondents said they are interested in BNPL to pay for essential services. Perhaps not surprisingly, those feeling stressed by the current economic situation—intensified by Rising inflation And falling stock prices (and thus dwindling retirement and other savings) – more fortunate than less stressed consumers want the BNPL option for larger purchases, at rates of 74% versus 53%, respectively.

This makes a lot of sense in the broader financial context of the US. As was widely reported in recent years, many US consumers Can’t cover an unexpected $400 expense, so most would be expected to want access to flexible financing instruments. In fact, the survey showed that 79% of respondents cut down on discretionary spending — “wants” — to save on things they really need, whether gas or groceries. Worse, two-thirds of consumers have delayed essential services, including home repairs (27%) and dental work (27%).

But it is not only those who are more needy who see the benefits of BNPL. In fact, the survey found that respondents with an annual household income of more than $100,000 were more likely to say they needed an essential service in the next six months (18%) than households earning less than $75,000 (11%). are “very likely” for financing. , possibly because higher-income households may be more willing to make bigger purchases in the near future.

People feel positive about BNPL

It is clear that people want to have the BNPL option. But how do they feel about its use, especially given some of the concerns expressed in the court of public opinion?

The survey suggested that, overall, those who used BNPL felt very positive about it, whether they had availed the financing option for discretionary or non-discretionary purchases. For example, those who used the payment option for necessities reported a positive feeling about it, including relief (63%), happiness (47%), and euphoria (39%); Only 10% reported feelings of regret or stress.

Of those who had previously used BNPL, a majority (76%) have used this payment option more than once, with an average of five transactions completed. It suggests some measures of trust related to BNPL.

a shared responsibility

On the one hand, our survey results show that BNPL appeals to a wider range of consumers as a more flexible payment option that can help them reduce debt and stress associated with a variety of purchases.

On the other hand, the industry will have to take seriously some of the shortcomings of BNPL expressed in the media, as part of an ongoing, concerted effort to keep customer needs central. Ideally, this starts with helping people take a thoughtful approach to credit utilization in particular and spending in general. BNPL providers should not contribute to a dangerous trend that turns some consumers on its head financially and should not try to misunderstand consumers as necessities.

But when expenses are unavoidable – such as in the case of dental work, car repairs or equipment replacement – ​​a BNPL can be an important option. Providing BNPL with no nexus like customer-centric – flexibility, transparency, lower interest rates than typical credit cards, high approval rates and hidden fees – is critical to ensure that everyone in the ecosystem – the providers, Customers and Merchants – Benefit. And it is the key to sustainable solutions in a more challenging market scenario.

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