Buy now, pay later is a type of short-term loan that can be used to pay for purchases online or in stores at participating retailers. There are a number of platforms that offer these point-of-sale installment loans, including:
Zip (previously Quadpay)
According to the Q4 2021 BNPL Survey, BNPL payment in the United States is expected to grow by 66.5% on annual basis to reach US$ 82086.8 million in 2022. The medium to long term growth story of the BNPL industry in the United States remains strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a CAGR of 32.5% during 2022-2028. The BNPL Gross Merchandise Value in the country will increase from US$ 49296.0 million in 2021 to reach US$ 443781.4 million by 2028. Over the last four to eight quarters, the popularity of buy now, pay later (BNPL) products has surged significantly in the United States. The global pandemic and the growing need for splitting the cost of purchases over a period of time has led to widespread adoption of BNPL products such as the one offered by Klarna, Afterpay, Affirm, Neon, and PayPal in the country. Moreover, the growth in volumes for these BNPL providers has been driven in part by the boom in online shopping during the global pandemic.
The buy now, pay later concept is nothing new, but it took on momentum during the pandemic and may now undergo unstoppable growth in the next few years, according to RBC equity analyst Dan Perlin, who analyzed data on BNPL contained in the 2022 Global Payments Report recently released by FIS Inc.’s Worldpay unit. “We think the data broadly supports a view for BNPL’s ability to capture additional share, not only as a [percentage] of [e-commerce] spend, but also potentially offline as well.”
The United States, indeed, has seen the fastest growth in BNPL consumer spending online among the countries analyzed, at 155% year-over-year through 2021, according to the report and RBC’s analysis.
PayPal pay in 4 allows you to pay off purchases with more than 1 million merchants in four equal installments over six weeks.
The service doesn’t charge interest, and the only fee is a late-payment fee.
PayPal may run a soft credit check when you apply, but it won’t affect your credit score.
Pay in 4 is just one of many BNPL services, so it’s important to compare options before you settle on one.
BNPL services may be a good alternative to credit cards, because many don’t charge interest.