The appeal of breaking down purchases into smaller payment installments remains strong, despite ongoing worries about rising consumer debt. J.D.

Power reports that consumers are generally highly satisfied with buy now, pay later plans, with financially stable consumers expressing the highest satisfaction. Customer satisfaction with BNPL services increased by 16 points year over year, largely attributed to their ease of use, security of account information, and reasonable terms. Among users, those who identified as “financially healthy” represented 21% and reported the highest overall satisfaction with these installment plans. In contrast, those who were more financially vulnerable accounted for nearly a third of BNPL usage, correlating with notably lower overall satisfaction scores. Interestingly, despite growing concerns about BNPL services leading to consumer debt, J.D.

Power’s findings reveal a more positive perception. More consumers view BNPL brands favorably than unfavorably, with nearly half expressing intent to reuse the same brand for future purchases, marking a 4 percentage point increase from 2023. When it came to the BNPL services that were ranked highest in satisfaction, Plan It by American Express took the top spot, followed by My Chase Plan, and Citi Flex Pay.   The State of BNPL BNPL has grown in popularity, with retailers like Walmart now offering them at self-checkout kiosks in more than 4,500 stores.

Consumers who spend a minimum of $144 on non-grocery items can split their payments using the service. Even during the recent holiday season, BNPL saw increased adoption, particularly among budget-conscious shoppers aiming to manage tight budgets. However, as more consumers rely on BNPL, concerns about escalating consumer debt have emerged.  Data from The Centre for Financial Capability revealed that 22% of BNPL users missed one or more repayments, with younger demographics being more prone to such delays. But a heavier regulatory landscape is coming—at least in New York.

Governor Kathy Hochul announced plans to introduce licensing requirements for BNPL lenders operating in the state. Additionally, these lenders would need to be transparently communicate loan terms and report their activities to credit bureaus.

By Rimma Kats
Mar 01, 2024 00:00
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