Throughout 2020, consumers continued to utilise the convenience of Buy Now Pay Later (BNPL) programs. Products such as Zip Pay, allow users to purchase products immediately and repay them over weeks or months.
In a 2020 survey, Zip polled BNPL users on their preference for the program. When asked why they intend to use a Buy Now Pay Later service, 60% of respondents answered that they ‘liked the repayment structure’.
This sort of repayment structure is new to the world of credit-style purchases. As is the case with Zip, users can set their own repayment structure. They may choose from weekly, fortnightly, or monthly payments with the option to pay nothing upfront. Not only that, but on-time payments are interest-free, meaning users will only ever pay the retail price of their purchases.
A Buy Now Pay Later repayment structure offers an equal chance for Australians to use this type of service, not just those who can cope with interest payments. It also means many users are exposed to proper budgeting and can link repayments to their salary schedule.
Zip also allows users to pay household bills through BPay. This helps balance budgets by allowing bills to be spread across easy payment installments set at their choosing. In this way, BNPL is a gamechanger for those who struggle when multiple bills are due at once.
In the survey, respondents polled indicated that they also opted to use a BNPL service due to the ease of use (48%). Many appreciate the fact that these services are easy to set up and can be done so in a few easy steps. Of those polled, 29% responded that they wanted to avoid hefty credit card fees. BNPL has won over consumers looking for an easy route for online and in-store shopping with their straightforward setup process and interest-free buying.
While there are many reasons to appreciate Buy Now Pay Later programs, consumers have spoken and stated that the main draw remains the repayment structure. As 2021 unfolds, it will be interesting to see if this data influences a change in the traditional bank credit structure. Conservative based programs may benefit from more flexible, less restrictive payment structures.
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