This week’s payment news roundup covers the demographics behind the BNPL increase, the reasons why customers are backing the digital shift, the latest on subscription payments, and more.
Millennials, Gen Z driving use of BNPL options
The use of buy now, pay later (BNPL) continues to increase, driven largely by younger consumers. The latest Buy Now, Pay Later Tracker from Pymnts.com found that, in 2020, millennials made up the largest share of BNPL users by age group, at 40%. It’s also expected that 44% of Gen Z consumers will use BNPL at least once by the end of this year.
In one survey, over half of millennials said the availability of payment options like BNPL affects where they shop. This is likely one reason that, while BNPL caught on very quickly in the ecommerce sector, it’s now also expanding into brick-and-mortar stores and even the food and beverage industry.
Some BNPL providers are working with solutions like virtual cards in order to begin offering installment payment plans in brick-and-mortar stores. In some countries like Australia, BNPL providers are even getting into the food and beverage space, providing BNPL options for dining out and grocery shopping.
For more information on BNPL and how it works, check out our recent infographic.
Consumers prefer to pay digitally instead of using cash, select vendors who offer cashless payments
Thryv Holdings surveyed 2,050 small business consumers about what customers are looking for from the payments experience, as well as how that affects businesses. Their findings underscored the importance of businesses including payments in their strategies to offer a good customer experience. A few highlights:
- 73% of consumers say that when comparing two businesses, the type of payment options available will influence their final decision.
- 68% of Millennials and 71% of Gen Z respondents prefer cashless payment options.
- 59% of consumers say they used contactless payment methods, including digital wallets, more often during the pandemic, and 71% say they intend to continue using them in the future.
- 64% of consumers say they prefer digital payments when paying for larger services, like home repair or medical treatment.
- 67% of consumers said they prefer to receive receipts in a format other than paper, such as email or text.
Survey says…show me contactless payments!
Multiple new research studies show that continued adoption of contactless transactions is not limited to the United States - contactless use is expanding across the globe. PaymentsJournal and Insider Intelligence summarized some of the findings:
- In Germany: 46% of consumers ages 16 and older reported they use a contactless card in-store once a week, daily, or several times a day.
- In the UK: 48% of consumers said the pandemic either caused them to begin using contactless payment methods or to start using them more often.
- In France: 40% of adults noted that speed was a big advantage of contactless payments, and 29% cited simplicity.
For a deeper dive into contactless payments, check out our guide.
The value of consumer certainty in driving digital transformation
As the articles above show, the use of contactless and other digital payments continues to grow. Pymnts.com analyzed studies they’ve conducted in multiple countries over the past two years for insights into the reasons why consumers have shifted to digital payments.
They noted that the why is “the certainty of [the consumer’s] experiences with businesses and brands when digital is embedded into the consumer’s daily life.” Consumers appreciate the certainty of knowing that items are in stock, or that their subscription purchases will show up at the same time each month.
One Pymnts.com study noted that consumers are 63% more likely to do business with a merchant that offered their preferred way to pay than those that did not. This statistic further underscores the fact that customers appreciate certainty and predictability in their purchasing experiences.
Most popular online subscription types in 2021
PaymentsJournal summarized a recent Mercator Advisory Group report about recurring and subscription payments. They noted that the key to customer generation and retention in this market is reducing friction.
The report also shared the most popular online subscription types in 2021:
- 61% of US consumers had at least one online subscription in 2021.
- 49% of US consumers had a video streaming subscription in 2021.
- 27% of US consumers had a music streaming subscription in 2021.
- 16% of US consumers had a news or magazine subscription in 2021.
- 14% of US consumers had a software subscription in 2021.
- 11% of US consumers had a premium app subscription in 2021.
For more on subscription billing (also called recurring billing), visit our recent guide on the topic.
Whether you’re interested in the latest in payment technology or just want to stay up to date on the latest payment trends, we can help. For the latest payments industry news, make sure to subscribe to our blog.