Gen Z Drives Growth of ‘Buy Now, Pay Later’

New research reports that 48% of Gen Z consumers have used Buy Now, Pay Later (BNPL) for purchases in the last three months, with more than 1-in-5 saying that they’ve used BNPL more than three times in the last three months, according to “Billtrust’s 2022-2023 Gen Z and Digital Payments Study.” Highlighting the potential danger of this adoption is the fact that Gen Z has seen their credit card debt rise significantly higher than other generations this year.

Called Gen Z’s credit card, BNPL is a form of installment loan that divides purchases into multiple equal payments, with the first due at checkout and the remaining billed to a debit or credit card until a purchase is paid in full. Gen Z makes up 55% of user penetration in the space, and Katie Horton, a representative from Billtrust’s marketing team, told Retail Leader Pro the cohort is taking advantage of it at a greater rate because BNPL has been more widely available within the Gen Z era.

Overall, a study from Juniper Research has found that consumer spending using BNPL platforms will reach $437 billion globally in 2027; rising from $112 billion in 2022. This sizable growth of 291% will be driven by escalating financial pressures from the rising cost of living, increasing the demand for cheap credit solutions.

Simplicity of BNPL

Gen Z — as all generations do — use credit and debt as a way to finance purchases. A study from TransUnion found that 50% of “credit-active” Gen Zers in the U.S. have a credit card. While not surprising, it opened the door for Gen Z to adopt newer forms of credit and debt, such as BNPL options.