How Buy Now, Pay Later Services Can Drive Even More Usage and Adoption

The adoption of buy now, pay later (BNPL) services has skyrocketed over the past few years, with a significant 186 percent increase in usage between September 2019 and September 2020. The surge in recent use can no doubt be attributed to the uncertainty tied to COVID-19 and the financial anxieties that come with it.

To better understand the BNPL landscape, quantilope surveyed 400 U.S. consumers (300 of whom specified that they were open to using BNPL payment options or already do so, 100 of whom were not open to it) to learn what motivates shoppers to use BNPL services and how they’re using them. The study found that just shy of one-third of respondents are using the payment service (29 percent). However, of those who do use BNPL, the majority have done so within the past three months. Additionally, those who use the service are typically not just one-time users; 60 percent of users are utilizing the service for online transactions at least once a month.

To grow this number, BNPL service providers should focus their marketing efforts on supporting financial well-being. We asked consumers about why they would consider using a BNPL option, and the top three responses were “to help me budget” (49 percent), “to reduce financial stress” (43 percent), and “for unexpected emergency items” (36 percent). Positioning yourself as a trusted, long-term, financial support system for consumers to get through big life moments (e.g., moving, welcoming a new child, etc.) will resonate with customers more than a focus on treating yourself or buying luxury items. BNPL service providers can also lean into the idea of making smarter financial decisions today to be more prepared for unexpected emergencies down the line. Emphasizing a long-term vs. short-term approach to money and spending habits can turn one-time users into repeat customers.

The top features/benefits that respondents deem as the most important for a BNPL service are all related to payment factors. The top two features of BNPL services are “interest free payments” and “no hidden fees.” Regardless of the structure, BNPL service providers must have a very simple and clear communication strategy about their fees in order to convert considers into users. Including a short explanation on your website homepage and on the checkout page will make consumers feel reassured that they know exactly what they’re going to owe and when. Reducing complexities is key when converting consumers to adopt new financial processes.

Similarly, respondents who are unlikely to use BNPL services in the future are also the most untrustworthy of these services (26 percent of consumers who are rejectors of BNPL services view them as untrustworthy). Implementing real-life client customer use cases can help to build trust in BNPL, especially when creating authentic narratives for how BNPL services support big life moments.

quantilope’s study found that usage of BNPL services has increased by 35 percent since the start of COVID-19. As usage grows, services providers that provide clear fee structures and build trust through supporting long-term financial well-being will not only be able to better help consumers with their own financial goals, but they'll be able to continue to drive usage and reap the benefits from the ever-increasing demand for more easy-to-use financial solutions.

The full results from quantilope’s BNPL study can be downloaded here.

Thomas Fandrich is the co-founder of quantilope, an agile insights software transforming the speed, complexity and quality that hinders traditional market research.