More than Half of Americans Turn to Buy Now, Pay Later During Financially Stressful Times

Rhea-AI Summary

Afterpay, a leading Buy Now, Pay Later (BNPL) provider, conducted a survey with Morning Consult revealing that over half of Americans feel financially stressed, with more than 75% of Afterpay users finding BNPL helps alleviate this stress. The survey, conducted among 2207 adults aged 18-55, shows 86% of Afterpay users experience reduced financial stress at purchase time, while 80% feel the same after two payments, and 76% at the end of the payment cycle. The highest BNPL impact areas include weddings (61%), large household purchases (61%), back-to-school shopping (53%), and home buying (51%). As of Q1 2024, 98% of Afterpay's Pay-in-4 purchases did not incur late fees, and 95% of installments were paid on time. Afterpay is also noted for its consumer protections, including starting customers with a low limit and pausing accounts if repayments are missed.

Positive

• Over 75% of Afterpay users find BNPL reduces financial stress.
• 86% of Afterpay users experience reduced financial stress at purchase time.
• 98% of Afterpay's Pay-in-4 purchases did not incur late fees in Q1 2024.
• 95% of Afterpay's installments were paid on time in Q1 2024.
• Afterpay is tied for first as the most commonly considered and most trusted BNPL brand.

Negative

• 51% of Americans feel financially stressed, indicating economic challenges.
• BNPL usage reflects underlying financial stress among consumers, particularly Millennials and Gen Z.

• 4 in 5 ‘Buy Now, Pay Later’ customers confirm Pay-in-Four innovation helped reduce their financial stress throughout the payment cycle
• More than 75% of Afterpay customers say that ‘Buy Now, Pay Later’ reduces their financial stress at the time of purchase, and throughout the installments journey

DISTRIBUTED-WORK-MODEL/SAN FRANCISCO--(BUSINESS WIRE)-- Afterpay, a leader in Buy Now, Pay Later (BNPL), has conducted research with Morning Consult revealing Americans are more financially stressed today than a year ago, with more than half (51%) of Americans feeling financially squeezed. As a result, BNPL was considered by 4 in 5 users as an effective solution to alleviating financial stress, especially among Millennials and Gen Zs who are preparing for a pivotal or large life change this summer.

(Graphic: Afterpay)

As demonstrated by the survey, U.S. consumers not only believe that BNPL can help reduce financial stress throughout the payments journey, but results proved it does. 82% of BNPL consumers surveyed said that traditional Pay-in-4 models reduce their financial stress at checkout, and 77% and 78%, respectively, indicated the same sentiment after 2 payments and when the payment journey is complete. Among Afterpay users, the results are even higher – 86% said BNPL reduces stress at the time of purchase, 80% indicated the same sentiment after 2 payments, and 76% when the payment journey is over.

As Americans head into the summertime, many see the potential of BNPL as a solution to combat their feelings of financial insecurity for major life events. According to the survey, the highest impact areas of BNPL consideration include weddings (61%), large household purchases (61%), back to school shopping (53%), and preparing to buy a home (51%).

Many American consumers are feeling the effects of inflation, attributing it to a heightened state of financial stress. Customers who use Afterpay’s Pay-in-4 BNPL benefit from managing their budgets with the flexibility and choice of either breaking out their purchases over four installments or paying the entire purchase off at any time – all while incurring zero costs from Afterpay if installments are paid on time. As of the first quarter of 2024, 98% of Afterpay Pay-in-4 purchases did not incur late fees, and 95% of installments were paid on time, consistent with prior periods.

Afterpay continues to invest in consumer protections to help customers limit their risk. Unlike a credit card, Afterpay starts customers with a low limit, pauses accounts if a customer has missed a repayment, and caps late fees. Among the BNPL brands listed in the survey, Afterpay was tied for first as the most commonly considered as well as the most trusted brand.

Methodology

Morning Consult’s Afterpay Financial Sentiment Survey (May 2024) was conducted between April 26 - 30, 2024 among 2207 adults aged 18-55 in the U.S. All interviews were conducted online. Results from the full survey have a margin of error of +/- 2%, and the margin of error among subgroups is greater. All subgroups highlighted in reporting have a base N size of 100 or more unless otherwise stated.

About Afterpay

Afterpay is transforming the way we pay by allowing customers to buy products immediately and pay over time - enabling simple, transparent and responsible spending. We are on a mission to power an economy in which everyone wins. Afterpay is offered by thousands of the world’s favorite retailers and used by millions of active global customers. Afterpay is currently available in Australia, Canada, New Zealand, the United States and the United Kingdom, where it is known as Clearpay. Afterpay is a wholly owned subsidiary of Block, Inc. (NYSE: SQ).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240626136893/en/

media@afterpay.com

Source: Block, Inc.

FAQ

How does Afterpay's Buy Now, Pay Later service alleviate financial stress?

According to a survey, 86% of Afterpay users experience reduced financial stress at purchase time, and 75% feel less stressed throughout the installment journey.

What percentage of Afterpay's Pay-in-4 purchases incur late fees?

As of Q1 2024, 98% of Afterpay's Pay-in-4 purchases did not incur late fees.

What are the key areas where BNPL has the highest impact?

The highest impact areas for BNPL are weddings (61%), large household purchases (61%), back-to-school shopping (53%), and home buying (51%).

How does Afterpay compare to other BNPL brands in terms of trust?

Afterpay is tied for first as the most commonly considered and most trusted BNPL brand according to the survey.

What is the on-time payment rate for Afterpay's installments?

In Q1 2024, 95% of Afterpay's installments were paid on time.