A Sezzle Survey Says Consumers Expect To Make Even Greater Use Of BNPL This Year

Two years after the Covid-19 pandemic helped make buy now, pay later loans popular with online shoppers, BNPL remains a highly attractive payment option, according to a study by BNPL provider Sezzle Inc. Of the 1,153 online shoppers surveyed by Sezzle, 60% of BNPL users plan to use BNPL more often in 2022. Among Sezzle users, that figure jumps to 69%.

In addition, BNPL continues to attract new users at high rates. Among the BNPL users surveyed, 65% say they made their first BNPL purchase in the past 12 months. Among Sezzle users, 58% say they made their first BNPL payment during that period. Of the online shoppers Sezzle surveyed, 767 are using BNPL and the remainder are open to using it.

When it comes to the reasons consumers use BNPL, 66% of respondents cite the ability to pay off a purchase over time, 47% cite the opportunity to take an interest free loan, 43% say it affords them the opportunity to increase their purchasing power, 38% say it allows them to make a purchase they otherwise could not afford, and 31% say BNPL provides a fast and easy customer experience. Multiple responses were permitted.

Products commonly purchased over the past year by consumers taking out BNPL loans include clothing and shoes (59%), computer/electronics (42%), home/home improvement (28%), beauty/cosmetics (28%), and toys/games (24%).

BNPL users spent about $150 per transaction in 2021, and the price point at which consumers would consider a BNPL loan is $225, according to Sezzle, which last month reached an agreement to be acquired by Australian fintech Zip Co Ltd. in an all-stock deal that values Sezzle at $355.5 million. The average BNPL credit limit is $791, the study says.

Despite the popularity of BNPL loans among consumers, repayment has been an issue. Of the BNPL users who have missed a payment, 61% say they have missed a payment more than once, while 39% say they have missed a payment once.

When a BNPL payment is missed, 51% of respondents say they reschedule the payment, 30% say they have a payment automatically take out of a designated account at a later date, and 16% say they have made use of a one-free-repayment option if offered by the lender.

The meteoric rise of BNPL, and issues such as its high delinquency rates, have caught the attention of the Consumer Financial Protection Bureau, which has requested information from five BNPL providers—Afterpay Ltd., Klarna AB, PayPal Holdings Inc., Affirm Inc., and Zip—about their operations. 

Last week, the Electronic Transactions Association released a letter it hopes will ease the regulator’s concerns about key issues such as debt accumulation, regulatory arbitrage, and data usage among BNPL providers.