Retailers are pulling out all the stops to drive holiday shopping in order to salvage 2020 sales results. Buy Now-Pay Later (BNPL) plans via installment lending will play a big role, with two separate deals recently announced in this space.
One involves Macy’s making an investment in Klarna, allowing the retailer to offer installment lending for online sales. The other is Simon Malls partnering with Afterpay for POS alternative lending at shopping mall stores. Many shoppers have adopted BNPL plans and the market has shown strong growth. This holiday shopping season will depend on the level of recovery for household income and consumer spending, which in turn will be impacted by any future federal stimulus action. Stay tuned.
From CNBC: Macy’s, the largest U.S. department store operator, has signed a deal to invest in Swedish payments group Klarna, joining investors including rapper Snoop Dogg and BlackRock in betting on the “buy now, pay later” online payments market. The deal includes a five-year partnership between the two companies under which Macy’s customers could choose to make payments in four equal, interest-free installments at the online checkout.
Macy’s would be one of the first department store companies to offer Klarna’s “buy now, pay later” (BNPL) service. Klarna has a similar tie-up already with H&M, the world’s second-biggest fashion retailer. “We are in discussions with some global retailers on exclusive deals,” Klarna Chief Executive Officer Sebastian Siemiatkowski told Reuters.
From Yahoo Finance: Afterpay , the leader in “Buy Now, Pay Later” payments, and Simon, announced today a national collaboration to support retailers and promote Afterpay in-store payment services to consumers ahead of the busy holiday shopping season. “Afterpay’s unique in-store payment solution allows our shoppers to make immediate purchases from our retail tenants, while paying over time, interest free – driving additional sales for our retailers,” said Mikael Thygesen, Chief Marketing Officer, Simon.
“With the busy holiday season upon us, we are proud to offer a truly multi-channel payment solution that has proven to bring new customers and increased sales to our retail partners,” said Melissa Davis, Afterpay’s EVP of North America.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group