- More than one-third of U.S. consumers plan to spend more this holiday season than last year, according to a survey released Tuesday by Block’s merchant business Square and its buy now, pay later provider Afterpay. Seventy-one percent of Square merchants anticipate an increase in sales this holiday season, compared to last year.
- Among consumers who use buy now, pay later services, 40% do so mainly to budget and manage their spending, according to the survey, which polled 1,500 U.S. shoppers and 265 U.S. Square sellers. Of the consumers seeking BNPL payment options, 34% described the checkout process as fast and easy, and 29% perceived the payment option as safe and secure.
- As more than three-quarters of shoppers said inflation has made it difficult to save, about 21% of consumers said they’d consider using a BNPL option to stretch their holiday shopping budget, the report said. By age group, millennials are the most willing, with 35% expressing this.
Square and Afterpay’s poll builds upon other reports that have predicted a rise in sales this holiday season.
Consulting and advisory firm Deloitte projects this year’s holiday sales will see a bump between 3.5% and 4.6% compared to last year, according to its September report. Mastercard released a report last month predicting that holiday spending between Nov. 1 and Dec. 24 will rise 3.7% over last year.
More than half (51%) of merchants said they planned to host a curated holiday event, and over a third (39%) plan to offer loyalty programs to customers, according to the Square and Afterpay report. Nearly a third of consumers (31%) plan to use shopping apps, and 22% plan to use wishlist apps or websites for their holiday shopping.
Interest in BNPL services has steadily risen since the trend gained steam in the U.S. during the COVID-19 pandemic. A March report from market research firm J.D. Power determined that the share of Americans with an active BNPL account reached 22% in January, up from 18% last October and 14% in July 2021. Twenty-nine percent of survey respondents said encountering BNPL services at checkout sparked their interest in the payment option.
Consumer interest in BNPL has led more companies to jump into the installment payment arena. Earlier this year, tech giant Apple introduced Apple Pay Later, its BNPL service, to select users.
In August, Amazon confirmed that it expanded its installment payment option, making it accessible through its Amazon Pay tool on other retailers’ websites; the e-commerce behemoth didn’t share when it implemented the change.
So far, Apple’s BNPL service appears to be capturing consumers’ attention. About 19% of consumers who use installment payment services have tried Apple’s BNPL service, J.D. Power said in a July report. Still, more than a third of consumers use PayPal (39%) and Afterpay (33%).