Insight Flash: CE Transact data highlights increasing utilization of BNPL platforms during Black Friday/Cyber Monday weekend. 

As market watchers and industry insiders digest this year’s holiday shopping season, one narrative that has emerged is an increased usage of Buy Now Pay Later offerings in the face of higher prices and stretched shoppers.

BFCM 2023 Buy Now Pay Later Transaction Volume

Using the Black Friday/Cyber Monday weekend as an observation window, CE Transact data indicates 2023 BNPL volumes as being nearly 10x higher than pre-Covid years. Additionally, BNPL payment volumes as a share of online spend for commonly-shopped categories over that same weekend increased from well under 1%, pre-pandemic, to over 8% in 2023. From 2022 to 2023, volumes increased nearly 20%, further accelerating from 2022 yoy growth of 17%.

Buy Now Pay Later Usage by Income Brackets

As spectators try to suss out the drivers underpinning this trend, some have highlighted that, in an environment where shoppers have cited trepidation about prices, savings, and spending power going into the holiday cycle, Buy Now Pay Later platforms offer a potential outlet for strapped shoppers. However, using CE’s proprietary Cohort demographic data, we see that this year’s BNPL growth looked much more evenly distributed across income buckets, albeit off of significantly different bases. Even with this more equitable growth profile, we still observe the highest concentration of BNPL users in those shoppers earning <$40k/year (almost 25% of shoppers in that category), versus the higher income brackets, which hover between 5-10%.

BFCM 2023 Buy Now Pay Later Average Order Value

Of further interest is that while BNPL uptake over Black/Cyber Weekend has continued to grow, the average size of ticket for this same window has held close to constant since Covid, implying that shoppers are not necessarily using BNPL offerings to fund ever larger purchases, but are using such platforms to fund purchases similar to those previously made up-front.

*Black/Cyber Weekend defined as the six-days starting Black friday through the subsequent Wednesday.
**BNPL Transaction Volume, defined as dollar spend for Affirm, Afterpay, Klarna, Paypal-Pay in 4, Quadpay, and Shop Pay Installments within CE U.S. Credit and Debit Card Data.
***Industry Index constructed to represent categories commonly shopped over Black/Cyber weekend and that see high BNPL usage. Defined as Apparel, Accessories & Footwear, Beauty Products, Electronics Retail, Home Furnishings, and Sporting Goods, Hobby, Toy & Game spend within CE U.S. Credit and Debit Card Data.

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About the Authors

Michael Gunther is the VP Head of Insights for the CEIC. Explore more of his insights here and follow him on LinkedIn.

Alex Breslin-Johnson is a Senior Insights Analyst for the CEIC. Follow him on LinkedIn.