Consumers spend around 10% more with ‘buy now, pay later’ (BNPL) schemes, according to new research by Imperial College Business School.
BNPL schemes also increase customers’ willingness to buy a product, with the likelihood of shoppers buying an item increasing by nine percentage points, the data showed.
The study also found that online shoppers using a credit card are more likely to use a BNPL offer than those purchasing with a debit card.
Customers who were more likely to be at risk of financial difficulties were also more likely to increase their spending using BNPL schemes, the study noted.
The Study
The findings are part of a study conducted by Dr Stijn Maesen, assistant professor of marketing at Imperial College Business School, and Dionysius Ang, associate professor of marketing at Leeds University Business School.
The aim of the study was to understand the impact of BNPL schemes on customer spending.
The study included weekly data from a large US retailer that introduced a BNPL scheme, whereby customers could spread their cost across four separate payments.
This data allowed the researchers to make a direct comparison of sales, made both before and after the BNPL scheme was introduced.
On average, the data showed that introducing a BNPL option to customers boosted sales, with customers who previously spent £100 more likely to spend £110, on average.
The study also found that the impact was not limited to a short-term boost, as customers purchased more, on average, for the remainder of the study.
BNPL Schemes
BNPL schemes have grown significantly in the past few years, and in 2024, the total number of users reached 380 million.
While, for many, they can be a helpful, interest-free way to alleviate the burden of large payments, there can also be negative effects for the purchaser, the researchers noted.
Maesen explained, “The risk is that these schemes allow financially vulnerable customers to take on unsustainable levels of debt – and in response to these issues, new rules and regulations are on the horizon in the UK.
“However, it’s clear that, for businesses, these schemes are proving incredibly beneficial for their profits.”
