Half of holiday shoppers are more likely to complete their purchase if they can use buy now, pay later, according to a recent survey by PayPal (NASDA: PYPL).
“PayPal data shows offering BNPL leads to a 91% higher average order value for enterprises and 62% higher for small businesses, meaning it isn’t just a nice-to-have, it’s a proven advantage to win,” PayPal General Manager of Small Business and Financial Services Michelle Gill said in a Oct. 22 statement announcing the survey results.
PayPal is the most commonly used BNPL service, according to a BankRate survey earlier this year.
Don’t Miss:
Gen Z and millennial shoppers are most likely to use BNPL for holiday shopping, the PayPal survey said, as one-in-four members of both generations regularly use the service. Respondents cited affordability and budget control as their primary reasons for using BNPL.
Buy now, pay later has become a part of everyday shopping for many U.S. consumers. Americans are expected to spend $116.7 billion via the services by the end of 2025, according to market newsletter The Kobeissi Letter earlier this year.
The Federal Reserve in May reported that 82% of people use BNPL for convenience.
It’s also become a necessity for some Americans. The Fed says 72% of BNPL users making less than $50,000 use it because it’s the only way they can afford certain purchases.
Trending: An EA Co-Founder Shapes This VC Backed Marketplace—Now You Can Invest in Gaming’s Next Big Platform
Nearly a quarter of BNPL users are financing their groceries, according to a Lending Tree survey earlier this year, up from 14% the prior year.
While this is a win for the providers, financial experts and officials have said it can be risky for shoppers, especially those with existing budget problems.
Nearly a quarter of all users had at least one missed payment from May 2024 to this past May, according to The Fed, up from 18% the year before. Lower-income shoppers had a higher rate of missed payments; 40% of BNPL users making less than $25,000 had a late payment, an increase of 9 percentage points year over year.
Only 13% of users making $100,000 or more missed a payment.
Some BNPL services don’t charge late fees, but others fine users as much as $15 per late payment.
Read Next: