A recent survey indicates that more than 50% of Americans are turning to Buy Now, Pay Later services to manage escalating financial pressures. Findings suggest that such services, like Afterpay’s Pay-in-4 model, are helping users alleviate stress and navigate major expenses responsibly.
More than Half of Americans Resort to ‘Buy Now, Pay Later’ Amid Financial Stress
San Francisco, June 26, 2024—In response to escalating financial pressures, a significant portion of Americans are turning to Buy Now, Pay Later (BNPL) services as a coping mechanism. According to research conducted by Morning Consult on behalf of BNPL provider Afterpay, 51% of Americans feel financially stressed, a marked increase from previous years. Millennials and Gen Zs, in particular, are utilising these services in preparation for major life events such as weddings, home purchases, and back-to-school shopping.
The survey reveals that 4 in 5 BNPL users find that these services help alleviate financial stress throughout their payment cycles. Pay-in-four models, a popular BNPL method, are particularly emphasised for their effectiveness. The study indicates that 82% of BNPL users experience reduced financial stress at the point of purchase, with 77% maintaining this sentiment after two payments and 78% at the completion of the payment journey.
Afterpay users reported even higher levels of stress reduction, with 86% feeling relief at the time of purchase, 80% after two payments, and 76% once the payment cycle was finalised. This trend is particularly notable as Americans head into summer, often a period associated with significant expenditures.
As the cost of living continues to rise, particularly due to inflated prices, BNPL services offer consumers a way to manage their budgets through phased payments. Afterpay’s Pay-in-4 model allows users to break down their purchases into four installments or settle the entire amount upfront, without incurring additional costs if payments are made on time. Impressively, data from the first quarter of 2024 demonstrates that 98% of Pay-in-4 purchases through Afterpay did not result in late fees, and 95% of payments were made on time.
Afterpay has also implemented consumer protection mechanisms to mitigate financial risks. Unlike traditional credit cards, Afterpay introduces customers to the service with a low spending limit. Accounts are paused if a payment is missed, and late fees are capped to prevent excessive debt accumulation. As a result, Afterpay has been recognised as one of the most trusted and frequently considered BNPL brands in the survey.
The survey, conducted online between April 26 and April 30, 2024, involved 2,207 U.S. adults aged 18-55. The results carry a margin of error of +/- 2%.
Afterpay, a subsidiary of Block, Inc., operates under the belief that flexible payment options can lead to responsible spending. The company’s aim is to foster an economic environment that benefits all parties involved. Available across multiple countries, including Australia, Canada, New Zealand, the United States, and the United Kingdom (where it operates as Clearpay), Afterpay is integrated with thousands of retailers globally.
With the growing popularity of BNPL services, it remains to be seen how traditional financial services will adapt. For now, BNPL appears to be a welcome reprieve for many Americans navigating the complex landscape of modern financial obligations.
