What Buyers are Purchasing with Buy Now Pay Later

We are all navigating through a challenging economy—and it doesn’t look like this is changing any time soon. According to a recently published report by the Congressional Budget Office, inflation is expected to stay above target well into 2023.

What do rising prices mean for consumers and brands? Reduced disposable income, and more selective shopping—at all price points. Show your customers that you have “got their back” as they navigate through the rest of this year. Along with sales and promotions, flexible payment options such as buy now, pay later will enable your customers to reserve cash to better budget for upcoming expenses that may be unknown.

According to Tom Carter, “Citizens Pay is in a position to help people afford something that they may have been able to purchase six months ago but may not be able to pay for all at once today. Spreading the cost out over several equal payments suddenly makes it easier to digest.”

To make budgeting easier, an increasing number of consumers are turning to BNPL payment options. In a recent article from Insider Intelligence, BNPL payments in the United States are expected to grow by 77.3% this year, reaching approximately $75.60 billion. Additionally, this growth will continue into the future and is predicted to surpass 100 billion by the end of 2024.

According to recent research by Fool.com, buy now pay later customers make purchases across the spectrum, from big-ticket items that they may not be able to afford with a single payment, to everyday household items:

• Electronics: 47%
• Clothing: 43%
• Furniture and appliances: 31%
• Personal care items or cosmetics: 28%
• Household essentials: 27%
• Groceries: 24%
• Books, movies, music, or games: 22%
• Other 8%

Although buy now pay later users don’t necessarily make these types of transactions every day (like credit cards), recent transaction growth is impressive, with nearly 12% of BNPL users making transactions at least once per week, doubling this amount to 36% of BNPL users making transactions at least once per month.

With this momentum behind consumers paying in installments, it is no surprise that electronics is the biggest category, making up nearly 47% of all BNPL purchases.

Capitalize on consumer electronics purchases

Serving consumer electronics merchants, service providers, and retailers since 2015, Citizens Pay retailers benefit from our experience. Retailers and service providers like Microsoft allow customers to purchase most consumer electronic items in installments, including mobile handsets, tablets, computers, printers, smart home equipment, TVs, and gaming consoles.

Seamless Upgrades

Within the hardware sale itself, retailers can offer the bundling of software and streaming services that enable the customer to purchase a computer or TV and include software and streaming subscriptions to make it a turn-key purchase with one payment.

Additionally, upgrades extend to the device, enabling customers to get the latest technology before the end of the payment term. Once a customer purchases with financing, they have the option to return that device before the end of the payment term, where Citizens Pay will then close out the transaction. With specific retailer partners, this allows the customer to upgrade to the latest technology with a new line of financing.

Flexible Terms

Thinking beyond quad pay transactions, many retailers are actively seeking to extend terms via installment programs. Early adopters of installment programs have seen growth in sales of higher-priced goods.

According to Beth Van Vliet, “Retailers are actively seeking more extended term options with every transaction to make payments more affordable for their customers.  This is where Citizens Pay is out ahead of other BNPL providers.”

Citizens Pay has the flexibility to offer favorable terms including 0% financing, and APR offers that can help cover the cost of your installment program. With the backing and reputation of an established and regulated bank, your customers will be reassured that, in partnership with the retailer, Citizens Pay will craft clear and credible consumer offers that are appropriate in any economic climate.

Customer Loyalty

With extended terms, retailers benefit from an open line of credit.  What does this mean for your customers? The ability to make several purchases over time that fit with their budget without having to re-apply for approval.

What does all of this mean for retailers? The ability to capitalize on consumer electronics purchases to maintain and expand relationships with their customers.

Going further than the Xbox

In December 2021, both Citizens and Microsoft announced the Citizens Pay BNPL platform would be available for customers of the Microsoft Store. 

This partnership originated in 2019, when Citizens began providing integrated financing for Microsoft’s Xbox All Access program, which bundles the Xbox console and a 24-month subscription to Xbox Game Pass Ultimate, delivering an integrated financing solution for easy delivery through retailers such as Target, Walmart and Best Buy.

This expanded partnership allows shoppers to purchase laptops, games, Xbox consoles and accessories with no-interest financing at checkout through microsoft.com, allowing consumers to spread out payments in equal monthly installments.

Microsoft Store customers may qualify for 12 or 18-month payment terms through Citizens Pay, the line of credit allows customers to make subsequent purchases without the need for an additional credit check.

This fundamental change to the way customers pay on microsoft.com will enable stronger customer loyalty and increased sales.

Why Citizens Pay is right for your customers

Built with Citizens’ extensive experience in consumer lending, Citizens Pay helps retailers engage customers with flexible BNPL solutions that meet customers at checkout, either online or in the store. Citizens Pay can be easily integrated within any point-of-sale interface, and fully customized with a range of payment plans to meet the needs of retailers and their customers.

In a world that runs on electronics—such as phones, tables, games, and smart TVs— a buy now pay later electronics solution must be customizable to meet the needs of merchants that sell electronics and must be flexible in real-time at checkout to meet the needs of the customer.

With Citizens Pay, consumers have a better way to pay for big purchases with easy-to-understand, low monthly payments, which can be used for repeat purchases without a new credit application or having to manage multiple loans.

The relationship between Citizens Pay and retailers is most successful when both parties are engaged in ensuring a successful purchase journey. Citizens Pay utilizes dedicated resources to work directly with retailers, identifying products and services that ensure customers’ needs are being met at the point of sale.

Businesses that have partnered with Citizens Pay are more successful in engaging and retaining their customers, increasing the average order value, while creating a purchasing experience that drives positive sales results.

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