• by Ray Schultz , Columnist, 9 hours ago

Email teams, take note: Buy Now Pay Later (BNPL) is surging, with 48% of consumers using the payment scheme weekly, in part due to economic concerns, according to a new study by behavioral data company Fullstory.

Many consumers in fact use BNPL several times per week, but it depends on their age: 37% of Gen X-ers buy using BNPL several times a week, along with 36% of Gen Z-ers and 34% of millennials. But only 5% of baby boomers do so. 

Among Gen Z respondents, 39% have increased their usage drastically over the past two years, versus 10% of baby boomers.

BNPL users also tend to be an affluent crowd: 54% of those with a household income of $150,000-$174,999 use BNPL multiple times per week. But only 4% of those in the $25,000-$49,999 income range do the same. 

What's driving the increase in usage?

“Consumers are taking advantage of alternative payment methods, likely as a result of the widespread desire to better manage spending given the challenging economic landscape,” said Jason Wolf, president, Fullstory. “To meet consumers where they are and give them the payment options that suit their individual needs, businesses should integrate BNPL into their checkout processes, particularly if they sell big-ticket items like electronics.” 

Of the consumers polled, 37% cited electronics as their top choice, followed by clothing & accessories (26%) and home goods & furniture (12%). Electronics is first for 40% of millennials, followed by 38% of Gen Z, 36% of Gen X, and 28% of baby boomers.

In addition, 30% of respondents rely on BNPL for more than half of their purchases, and 27% for more than one quarter.

But there are challenges. While 81% rate BNPL as convenient or very much so, 79% abandon BNPL checkouts at least sometimes, and 32% abandon “almost always.”

Why? Fear about hidden fees or unclear interest (34%), an unclear payment schedule (30%) and having to re-enter information (13%). 

The study notes that the adoption curve has peaked due to economic pressure and that consumers are increasingly leveraging BNPL as a line of credit.

When respondents need to contact BNPL customer support, the majority (52%) use email, followed by phone calls (42%) and live chat (34%).

“Most consumers think BNPL is convenient, but there’s still plenty of room for improvement in UX,” added Wolf. “Businesses risk alienating customers if they don’t have transparency around cost and payment schedules. User-centric platform design and personalization can help boost conversion and ensure consumers receive a frictionless purchase journey.”

Fullstory surveyed more than 1,000 U.S. consumers in February.