Buy Now, Pay Later (BNPL) solutions have exploded in popularity, with a staggering growth rate of 1000% since 2019. So far, this payment method has made it easy for millions to purchase nice-to-have items such as the latest iPhone, trendy sofas, designer handbags and stylish clothes without paying in full upfront.
However, the winds of change are blowing: as inflation and interest rates continue to climb, BNPL is shedding its reputation for luxury spending and becoming a customer financing solution for necessary expenses, such as car repair, healthcare, fridge and other essential appliance repair.
During economic times like these, merchants need to go the extra mile to encourage responsible and smarter use of BNPL, since irresponsible BNPL practices can potentially lead to unmanageable debt and jeopardize consumers’ financial health, ultimately damaging the merchant’s brand. Just think: If customers find themselves under financial strain due to unaffordable debt, they are likely to associate that negative experience with the retailer that enabled them to access capital.
Read the full article in Retail TouchPoints to find out the three effective solutions that retailers can adopt to prioritize the responsible use of BNPL.