Other Sciences

I bought it now and paid for the later installment payment.

An example of BNPL installment payment. Credit: Journal of Marketing (2024). DOI: 10.1177/00222242928282414

Researchers of IMPERIAL COLLEGE BUSINESS ScHool and Leeds University have published a marketing research journal that investigates the effects of BNPL installment payments on retail sales. The title of this survey is “Buy Now Pay Later: IMPFICT OF IMPACT OF IMPACT OF IMPACT OF ACTURAL BURCHASES” It is written by Ang.

Purchase now, Pay Later (BNPL) is an increasingly popular payment method, and customers can spread payments for less than a few weeks or months. Worldwide BNPL is expected to grow $ 316 billion in 2023 and to grow to $ 450 billion by 2027. More than 45 million U.S. customers have adopted this payment method, in partnership with BNPL providers such as affirm, KLARNA, and AFTERPAY, such as Walmart and H & M.

If a customer selects the BNPL installment payment in the participating retailer, the invoice will be paid to the retailer in full by the BNPL provider. Customers pay the BNPL provider for the first installment at the time of purchase, and repay the remaining interest -free payments over a short period of time.

However, despite the growing popularity of BNPL installments, the impact on retail sales is hardly known.

In this new survey, researchers have found that the BNPL installment payments increase expenditures using transaction data from major US retailers in the United States. BNPL enhances both the number of purchases and the average amount spent by allowing customers to pay for the purchase with less interest -bearing payments.

In this survey, the payment of BNPL installments is compared with the prepayment and delayed lump -sum payment. BNPL consistently promotes spending on various products (party supplies, apparel, flights, mugs, coffee pods, etc.) and installments (three installments, four installments, 6 divisions, etc.).

Power of recognized financial constraints

According to this survey, there are two main reasons for paying BNPL installments to more expenditures.

1) The impact of BNPL on expenditures is due to reducing the perceived financial constraints. In particular, the payment of BNPL installments has increased the number of customers who previously rely more on credit cards and tended to buy smaller baskets. Customers who pay by BNPL installments feel that both prepaid and delay are less financially constrained than those who pay the same amount of money. Customers can focus on the separated installment payment (“$ 15 in installments of $ 15”) and determine that these are less expensive than the aggregation period (“total cost $ 60”). By reducing the perceived financial constraints, BNPL installments encourage customers to spend more.

2) In addition, BNPL promotes budget management. In many cases, it is easier to estimate the budget of a short time (“next month”) than a long time frame. Unlike conventional payment of credit cards (a single lump -sum payment scheduled for the end of the month), installment payments are separated into a shorter time frame (four times a week). By emphasizing a shorter time frame, BNPL allows customers to be more controlled by their budget.

“By reducing the cost of payment and promoting budget management, it is discovered that the payment of BNPL installments is financially less restricted. As a result, this decrease in financial constraints leads to an increase in expenditures. “Maesen says.

Previous research focuses on the framework of the price of the total conditions ($ 60 per month) or the separation conditions ($ 15 per week), and the isolation and aggregation prices have an effect on the intention of recognition and purchase. Demonstrated. This new study is different from the previous research:

The BNPL installment is beyond the separated price frame, and it is necessary to make a actually separated payment over the specified period (“pay $ 60 in four weeks of $ 15”). This study uses the data of a trading retailer to study how to separate payment to BNPL installments affects the customer’s actual expenditure. This allows researchers to answer management -related questions about how shoppers change expenditures (in other words, depending on the size of the historical basket and the use of credit cards). 。 By separating payments, customers can control their budgets and reduce the perceived financial constraints. By operating additional mechanisms, our effects are not only applied to repeated consumption (for example, car leasing), but also generalized to one consumer (for example, air tickets).

This study provides practical insights to various stakeholders.

Consumers can benefit by using BNPL installments to make the budget more and financially restricted. 。 Retail managers need to consider integrating BNPL options and promoting sales. ANG said, “Retailers will benefit from the adoption of installments more frequently and increase the basket amount, so they will benefit. The amount will increase by about 10 %. ” Policy proprieters need to recognize the great impact of BNPL on consumer spending to ensure consumers while promoting financial flexibility. Social stakeholders, including consumer advocates, need to monitor the increase in the influence of BNPL and promote responsible spending practices.

Understanding the advantages and potential risks related to BNPL is very important because the payment method continues to rebuild the retail industry.

Details: STIJN MAESEN and other purchases now, pay later: Journal of Marketing (2024), the impact of installments for customer purchase. DOI: 10.1177/00222242928282414

Provided by American Marketing Association

Quote: Purchase now, pay for later installment payments, increase retail expenditures, find survey (February 4, 2025) February 4, 2025 https://phys.org/news/2025-02-buy Obtained from -Pay-payments-retail.html

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