Research findings reveal whether the popularity of alternative payment solutions will continue.
Following the explosion of Buy Now, Pay Later (BNPL) services in 2015, its popularity among consumers and online retailers has not wavered, yet it continues to be an ongoing focus area for the Royal Commission and ASIC.
Australian source of online industry insights, Power Retail, has launched its first report, titled ‘Buy Now, Pay Later – Fad or Future?’ which pinpoints the pressing issues around BNPL options and identifies how important it is to consumers; where the industry is headed and how retailers can leverage this to achieve growth.
Power Retail managing director, Grant Arnott says that increasingly buy now, pay later will become a consumer expectation.
“BNPL is a serious trend to take notice of right now. In a few years’ time it will no longer be an alternate payment option and will be simply expected by consumers. Also, due to the recent Royal Banking Commission, some consumers have lost trust in the banks and will therefore start trusting a new generation of financial services,’ he says.
“Alongside this, with the growing impact of Amazon Australia, competition in the Australian e-commerce sector has never been so fierce, and thus, success will come to those who adapt.”
The report found that BNPL has reached in excess of 1.8 million Australian users, and a growth rate of over 120% per annum.
Other key findings include that common BNPL transactions are conducted weekly, and most purchases are between $100 and $249, as the number of transactions has grown from 50,000 per month in April 2016, to 1.9 million transactions in June 2018.
Shoppers and retailers agree that those consumers who use BNPL tend to spend more, buy more items, shop more frequently and are more loyal to retailers who provide it. Millennials are currently the primary BNPL segment, but BNPL usage is rapidly expanding to other market segments.