NEW YORK--Consumers who use multiple buy now, pay later providers are also far more willing to pay interest in exchange for more time to repay their purchases, suggesting BNPL could have significant room to expand beyond the traditional Pay in 4 model.
According to the August edition of PYMNTS Intelligence’s The Pay Later Ecosystem Report, 82% of BNPL consumers who use four or more providers said they would pay interest for a longer repayment schedule. That compares with 70% of consumers using two or three providers and just 46% of those using a single provider. Overall, two-thirds of BNPL users said they would pay interest for a longer-term plan, while 14% would not and 21% were neutral.
Purchase size also appears to influence consumers’ willingness to pay for more time. PYMNTS found 54% of BNPL users would pay interest on longer repayment schedules for purchases below $100, rising to 58% for purchases between $100 and $499 and 79% for purchases from $500 to $999. Among purchases of $1,000 or more, 76% said they would pay interest. Credit quality produced another wrinkle: 76% of super-prime BNPL users were willing to pay interest for longer terms, compared with 64% of prime users and 50% of subprime users.
The findings also point to demand for more flexibility in how BNPL debt is repaid. According to the report, 88% of BNPL users want the ability to choose how many payments they use to divide a purchase, while only 4% disagreed. Although Pay in 4 remains the most common structure, used by 55% of U.S. BNPL consumers, 45% already use longer repayment arrangements, suggesting extended-term products could find their strongest audience among consumers already using BNPL extensively.