Wednesday, March 29, 2023
The Consumer Financial Protection Bureau reported that between 2019 and 2021, the number of BNPL loans originated in the U.S. by the top five BNPL firms grew 970 percent. During that same period, the dollar value of BNPL loans ballooned from $2 billion to $24.2 billion.
Juniper Research estimated global consumer spending using BNPL platforms will reach $437 billion in 2027, or 291 percent more than global spending on BNPL platforms in 2022. This growth, Juniper stated in a press release, "will be driven by escalating financial pressures from the rising cost of living, increasing demand for cheap credit solutions."
According to J.D. Power's analysis, 22 percent of Americans were using BNPL in January 2023, up from 18 percent in October 2022 and 14 percent in July 2021
Adobe's data suggests groceries and home furnishings – two categories of sales that had struggled to gain traction online – are charting strong growth, thanks to rising costs and BNPL. The company's analysis involved more than 1 trillion visits to U.S. retail sites, 100 million SKUs and 18 product categories.
The analysis revealed that Americans spent over $126 billion buying home furnishings online last year, a 10.2 percent increase over 2021, and $86.8 billion purchasing groceries online, a 10.8 percent increase over 2021. In February of this year, online sales of home furnishings grew 12.9 percent over February of 2022, driving $9.4 billion in spending for the category. Online grocery sales grew even more substantially, at 26.7 percent year-over-year, driving $8.4 billion in spending.
Vivak Pandya, lead analyst at Adobe Digital Insights, suggested the growth was driven by pandemic-induced shopping habits, and belt-tightening in the face of rising costs.
"Ecommerce demand has remained resilient in an uncertain economic environment, driven in part by lasting pandemic habits where consumers had no choice but to leverage online food and home furnishing shopping services," Pandya said. The rise in BNPL usage for groceries suggests consumers are making bigger purchases and taking advantage of special promotions to stock up on staples, "thus managing living expense in more flexible ways," he added.
"The strong online growth of home furnishing purchasing is expected to bolster buy now pay later adoption, given the higher ticket prices in this category," Pandya added.
The recorded and projected growth in BNPL has led BNPL to be dubbed "one of the hottest consumer trends in the world," J.D. Power said in a statement. And this has spurred "legions of banks, fintechs, retailers, and ecommerce platforms to get in on the action," the company added.
The best place to pitch BNPL, unsurprisingly, is at the point of sale. Overall, 29 percent of consumers surveyed by J.D. Power said they first became interested in a BNPL service because it was offered as an option at checkout. Other factors that piqued consumer interest included recommendations from family and friends (16 percent) and social media (14 percent). 
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