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Report: Offering BNPL Is Key to Unlocking Retail Spend for One-Quarter of US Consumers


As America recovers from a year of economic uncertainty, many consumers find themselves with damaged credit which may limit their ability to borrow money at affordable rates or even open a store credit card. According to PYMNTS research, these consumers face numerous challenges, not just in meeting their day-to-day expenses due to limited credit options, but also in accessing the credit lines which would allow them to purchase basic necessities.

In The Second-Chance Consumer: How Buy Now, Pay Later Payments Create New Merchant Opportunities, a PYMNTS and Sezzle collaboration, we interpret new findings drawn from our survey of 7,024 American consumers who are statistically representative of the adult population. In the report, PYMNTS examines the impact of buy now, pay later (BNPL) programs on consumers’ access to the retail marketplace.

The report chronicles the ways many consumers who are otherwise fiscally stable may have experienced interruptions in their ability to make payments on time during the past 18 months. Their blemished credit may cause a litany of financial issues, even when their earnings stabilize. Consumers with lower credits scores will likely pay more in interest on loans, or find it hard to be approved for a credit card.

PYMNTS’ research reveals that as many as 23% of American adults may need a “second chance” to gain access to the kind of low, affordable payments that a higher credit score would provide. BNPL programs allow consumers to split purchases into small, affordable installment payments. Unlike credit cards, BNPL programs do not charge fees simply for joining the service, and consumers with blemished credit are often approved.

Another benefit for consumers is that BNPL programs typically help shoppers rein in spending by limiting purchases to a few, small installment payments that can be paid in full over a few months. The limits on how much consumers can spend using BNPL is an advantage for some second-chance consumers, who have ample motivation to want to avoid long-term debt while purchasing necessities. Seventy percent of second-chance consumers who have used BNPL, or are interested in using it, view it as an option that improves their ability to buy things they want without overspending.

The use of BNPL also opens up new opportunities for merchants to reach new audiences who might otherwise not be able to afford to shop. As of  May, 28 million American consumers had made at least one purchase using BNPL.

To learn how BNPL is bringing second-chance shoppers back to retail, download the report.

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