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Buy Now, Pay Later: How Financial Services Marketers Can Keep Up

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The future of consumer financial services looks more short-term and interest-free. 

Buy Now, Pay Later (BNPL) has boomed in the last two years, especially coming off the heels of the pandemic. With trends such as digital acceleration, retail adoption, and younger shoppers driving up usage, new BNPL brands are quickly entering the market.

While BNPL may feel new, it's really akin to a modernized version of layaway, which retailers have offered since the 1930s. What these organizations understand is that our digital-first lifestyle is ripe with opportunities for innovation and transformation. Currently, 56% of consumers globally have used BNPL, and 60% say they are likely to use BNPL over the next six to 12 months. These new entrants are both well-funded and well-equipped to make a significant impact on the sector.

Here's what financial services marketers can learn from emerging BNPL brands and the ways they've positioned themselves for growth.

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When Consumer Attitudes Change, the Market Needs to Catch-up

BNPL has ascended quickly and is now beginning to disrupt the credit card industry. According to eMarketer, 44% of U.S. consumers now prefer to use BNPL services instead of credit cards.  As financial services brands gear up for an increasing number of Gen Z customers, they are also future-proofing their digital marketing strategies. Younger generations are more debt-averse, avoiding credit cards where hard credit checks are required when opening a new account. BNPL’s soft checks and lack of revolving credit will appeal to many Gen Zers for this very reason. So, what is it that consumers are looking for? According to FinExtra, people spend more when consumer brands offer BNPL, demonstrating that this flexibility is increasingly important to consumers. In fact, a survey conducted by Afterpay–a leading global BNPL brand–found that 42% of Gen Z and 69% of millennial shoppers are more likely to purchase items from brands that offer BNPL services. Those numbers should pique the curiosity of FinServ and retail marketers alike, considering the growth opportunity available. 

According to Movable Ink’s Associate Strategy Director for Retail Becki Francis, “Our leading global retail clients are calculating the cost of supply shortages and are still in the midst of the aftershock from the pandemic. As they look ahead to planning for Black Friday & Christmas, retailers are looking at more innovative ways than ever to build consumer engagement and capture wallet share. One of the key trends we’re observing is that offering flexible payment options is crucial, and BNPL is the payment option at the top of that priority list."


Retailers of all sizes now realize the value of BNPL options. Recently, both Walmart and Amazon announced partnerships with Affirm to offer BNPL to their customers at the point of purchase. While once considered a trend, Buy Now Pay Later is clearly here to stay.  

New Kids On the Block

Fintech brands around the world–Klarna (Sweden), Afterpay (Australia), and Affirm (US)–are innovating a once stagnant space and reaping the rewards. Klarna was valued at $46 billion in June 2021. Square purchased Afterpay for $29 billion, and Affirm will likely see a marcap valuation in the region of $30 billion by the end of October.

Now traditional financial brands are catching up. Visa and American Express already offer post-purchase BNPL products, and Goldman Sachs has partnered with Apple to enter the space. Even neobanks, the now less-new kids on the block, are looking for ways they can catch up too. Two of the U.K.’s best-known neobanks launched their BNPL proposition with the same name… on the same day! (Seriously, read more about Monzo Flex & Curve Flex here). So, with the pace of change happening so quickly, how can financial services marketers influence their organizations to meet the increasing consumer demand?

Three Quick Tips to Keep Up With the Market 

  • Clarity on Payment Terms & Reminders - Offer clear and flexible payment terms. Currently, 31% of BNPL users have made a late payment or incurred a fee, resulting in a negative user experience that could impact their behavior in the future. Brands can help minimize late charges by making it easy to access online support or breakdown payment terms for individual products across marketing communications both in and outside of their apps.

  • Integration and Engagement Across the Entire Purchase Journey - Success relies on engagement with consumers throughout the entire customer journey. By creating seamless, cross-channel experiences, brands can engage customers from pre-purchase through their final payments. Marketers can build personalized product recommendations and offers by integrating an API directly into their mobile app or email marketing campaigns. The largest players are now integrating with shopping platforms, emerging categories (such as Etsy or Wayfair), and eCommerce checkouts that expand their reach and presence as consumers browse and purchase. Finally, once a purchase is made, it is important for brands to clearly reinforce payment timing to ensure a positive experience for the customer.

  • Personalize the Experience Based on Zero Party Data - BNPL marketers often have blind spots in their data as they hand off to the merchant for purchase decisions. Brands can support their strategy by building out consumer profiles across marketing communications to avoid these blind spots. For example, by creating polls in email and mobile marketing campaigns, marketers can make customer segment profiles based on lifestyle, interest, or goal and utilize this for tailored communications throughout the lifecycle.

Positioning for Growth:

The growth of BNPL demonstrates that customers won't wait for financial services' historically slow pace of innovation. By putting customer needs first, both at the point of sale and throughout the marketing journey, financial services marketers can offer customers what they want while building or maintaining loyalty.

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