Buy Now, Pay Later is pushing the shopping cart revolution

We’ve all done it. In a late-night session of doomscrolling, we stumble across a vision, the product of our dreams, that must-have item that will right all wrongs. We head to the website, load it into our cart. It’s time to make this item ours! 

But as we hover over that “Buy Now” button, we recoil, our dreams dashed by the total cost and the realization that we can’t afford to pay the full price upfront.

To win cost-sensitive customers, retailers are rethinking the “Buy Now” button, using a new payment option that attaches a welcome suffix— “Pay Later.” Buy Now, Pay Later dishes a new thrill for Instagram scrollers and TikTokers, who can now ogle coveted items as something they can afford.

BNPL providers divide up larger payments into smaller, bite-sized chunks, serving as a boost over that once hopeless roadblock at checkout. Instead of paying the full amount outright (like a traditional credit card) or socking an item away until layaway payments are made—BNPL services divvy the total into smaller chunks that customers can pay over time. According to a study by The Motley Fool, people love BNPL because it helps them:

  1. Make out-of-budget purchases (44.98%)
  2. Avoid paying high credit card interest (36.92%)
  3. Borrow money without a credit check (24.73%)

For these reasons, it’s no surprise how popular BNPL has grown over the last year. A whopping 56% of Americans have already used a Buy Now, Pay Later service at checkout. Of those that have not yet made the leap, half are likely to try it out within the next year. Here’s why consumers are raving about Buy Now, Pay Later and how it’s helping retailers rethink the shopping experience.

Social media dazzles shopping preferences

Any shuttered kitschy mall shop can attest—experiences reign over strictly material things when luring the wallets of younger generations. Coined the “experience economy” by authors Joseph Pine II and James H. Gilmore, cruising the streets of Tokyo in a life-sized Mario Kart or brunching atop an Alaskan glacier is far more enticing than a tennis bracelet.

For many buyers, BNPL is a ticket to paradise. Veteran providers like Uplift have unraveled the complexities of bookings to offer bite-sized payment plans for all types of purchases.

Smart marketers in all industries have found a way to court social media users with these highly attractive experiential elements, and shoppers love to take the bait.

By seamlessly slotting a physical product into a social media-curated experience, material items are taking on a life of their own. Scrolling through social media instantly transports users into a living scene. A sun-basked apartment boasting hip wall prints and cozy seating areas. An influencer strolling historic, red-bricked streets in must-have haute fashion. Products are the props in a spectacularly staged Instagrammable experience—and everyone wants to be the star.

The lure is so strong that some studies show that social media influences 71% of purchasing decisions. The heft of e-commerce shoppers find their way to the shopping cart from platforms like Facebook, Pinterest, and Instagram. Uplift has provided a frictionless customer journey for highly intricate arrangements, and parlays this unmatched experience into the retail online shopping space. They’re in the buyer’s corner no matter what’s in the shopping basket, providing consumers with a payment option free of surprise fees or late penalties.

Crowning the list of common purchases? According to C+R Research, they’re the ones you see most frequently whizzing by your social feed:

  • Clothing
  • Electronics
  • Furniture
  • Appliances
  • Housewares
  • Cosmetics

The Buy Now, Pay Later industry opens new retail doors, where we’re not just casual onlookers, but can become full participants in the lifestyles we aspire to. Whether someone’s artistic dreams are captivated by the picture-perfect profile of a graphic designer churning out masterpieces on just the right equipment or new parents excited to decorate the world’s most oh-so-adorable nursery, BNPL lets more shoppers snag a slice of the good life.

How Buy Now, Pay Later affects the shopping cart

Online shoppers scrap too many shopping carts due to paralyzing sticker shock. BNPL is a new secret weapon for retailers, helping to slash cart abandonment rates by 20–40%. Buy Now, Pay Later options grant more customers a chance at the products they’ve been traditionally priced out of.

That’s not to say that Buy Now, Pay Later is a slot machine lever enabling impulse purchases. In fact, 90% of BNPL customers use the service once a month or less, with the majority opting for a split payment every six months or so. Partners like Uplift discourage consumers from using the tool to rack up unnecessary debt, instead empowering them to focus on the “thoughtful” purchases. The average BNPL consumer is paying installments on 3.8 items ranging from sofa upgrades to new laptops.

You might ask, why don’t they just use a credit card? 

A report by Experian reveals that the strongest deterrents for credit card usage amongst younger users are high-interest rates, annual fees, and an open tab for deepening debt. For many, they just don’t want to go through the rigmarole—61% of consumers are so overwhelmed by the number of available card options that they often ditch the process altogether. Since most BNPL arrangements are short-term and compound-interest-free, almost 30% of shoppers believe they’ll one day drop traditional credit cards from their wallets altogether.

For many shoppers, traditional credit cards are also intimidating. They’re notorious wielders of jargon like compounding interest and APR—terms that the Financial Educators Council has found are mind-boggling for most Americans. On the other hand, BNPL providers are rewriting how a customer relates to a lender, providing users with a straightforward, surprise-free summary of what is owed, when, and precisely what for. Uplift opts for simple interest as opposed to the compound models that hamper credit card usage.

Buy Now, Pay Later makes things more accessible than ever. Consumers don’t need to navigate a maze of offerings to pull the trigger on a purchase: just click the Buy Now, Pay Later button right in the shopping cart. For many shoppers, grabbing a BNPL payment plan takes just a few more clicks than inputting card info.

Who’s using Buy Now, Pay Later?

BNPL has experienced a 50% growth in less than one year, with 55.8% of consumers taking part in the trend. It’s most popular amongst the social media-savvy generations, with 6 out of 10 shoppers aged 18-44 opting to split up their shopping cart payment. They’re not just using it to scoop up high-dollar items but are opting for BNPL because it’s less of a drain on their wallet. In an era marked by uncertainty, 41% turn to Buy Now, Pay Later to help conserve cash in case of an emergency.

BNPL providers open up new retail doors for customers typically left out of the traditional credit card equation.

Financially comfortable customers who’d be the darling of any credit card provider, are also turning to BNPL. Often discounted as technology lowbrows, Baby Boomers are secretly emerging as one of the most technology-wielding generations in the payment space. In stores, 7 out of 10  Baby Boomers have paid with contactless tech like wearables or tappable chips. Another 70% bank online at least once per week. And now, with a 98% jump in growth from July 2020 to March 2021, they’re one of the fastest-growing segments for the Buy Now, Pay Later industry.

Flashy marketing, edgy messaging, and on-point product photography can’t get customers over that one final wall, an obstacle once considered insurmountable: the cost. For retailers, expanding their spectrum of payment options to include marquee BNPL offerings like Uplift has become such an urgent task that some are labeling payment the 5th P of marketing. Buy Now, Pay Later is shaking up the shopping cart so aggressively that many social media users insist they’ll only shop with brands that use it.

Is your site ready with this speedy payment option?