NEW YORK—Buy now, pay later lending has seen remarkable growth, driven primarily by younger, digitally savvy consumers, but BNPL may not always be dominated by fintechs, according to a new report.
“This trend is particularly evident during peak shopping seasons; for instance, consumer spending on BNPL transactions reached $17 billion between November and December, marking a 14% increase from the previous year,” PYMNTS said.
PYMNTS said in its analysis the surge indicates a clear shift in consumer preference toward flexible payment options that allow for the deferral of costs without incurring significant interest.
“The appeal of BNPL services lies in their seamless, user-friendly nature,” PYMNTS reported. “Customers appreciate the convenience of managing payments in small, manageable installments, which helps alleviate financial strain during uncertain economic times.”
The ’Key Factor’
Although fintechs initially pioneered the BNPL space, traditional banks are rapidly catching up, PYMNTS said.
“Banks possess inherent advantages that could position them favorably in the BNPL market,” PYMNTS stated. “A key factor is consumer trust; surveys indicate that a notable portion of Generation Z consumers and other demographic groups have greater confidence in banks compared to fintechs, particularly concerning fraud prevention and overall financial security.”