Buy Now, Pay Later (BNPL) firm Afterpay, recently announced the introduction of a new monthly payment option enabling customers to take an installment loan over a six- or twelve-month term for purchases between $400 and $4,000. For merchants, Afterpay’s new options extend the solution into more product verticals without any additional transaction fees or implementation costs.
The company plans to introduce the new offering in 2023 for in-person purchases and is currently offering monthly payment options at participating US merchant websites, including EyeBuyDirect, FWRD, Paper Market, Your Mechanic, CharlotteTillbury, and Bellacor.
It’s not newsworthy to say that BNPL is undergoing a period of explosive growth. The CFPB’s recent report on the BNPL market showed a 970% increase in loan originations and a 1,092% increase in gross merchandise volume in the U.S. from 2019 to 2021. What once was an industry largely focused on lower dollar spend at apparel and beauty merchants has extended into higher dollar value purchases such as fitness bikes, healthcare, and even air travel.
The new offering from Afterpay will give consumers access to big ticket items purchases and is a win for merchants wishing to extend a BNPL option for more expensive items thereby increasing average order value. More BNPL options at the point-of-sale dovetails with our own research that shows that consumers value flexibility and options in their ways to pay both online and in-store.
For more on Buy Now, Pay later, see our report.
Overview by Ben Danner, Research Analyst at Mercator Advisory Group.
