According to Zip, U.S. retail customers are increasingly using buy now, pay later (BNPL) options for in-store transactions.
In a conference call with analysts on Monday (26 August) to discuss the Australian FinTech company’s financial results for the fourth quarter of fiscal 2024, CEO Cynthia Scott spoke about this change.
“Our Americas business had a stellar year,” Scott said. “…higher margin channels, including the physical card, saw strong in-store engagement, with card volumes up nearly 150% year over year and in-store volume now representing 20% of total U.S. TTV (total transaction value).”
Overall, the America The company saw year-over-year increases in TTV of 39.5% and revenue of 45.6%, driven by “deeper customer engagement,” Scott said.
In fact, many consumers want the option to pay in stores with BNPL. The report “Tracking the adoption of digital payments: What BNPL needs to achieve wider adoptiona collaboration between PYMNTS Intelligence and AWS, found that one in three shoppers would like to see greater BNPL availability in brick-and-mortar stores. Further research from PYMNTS Intelligence shows that BNPL is only available in stores that half as often like online.
What Zip looks like to further increase the acceptance of BNPLit is alleged in view of Partnerships with Apple to integrate its installment payment features in the US In addition, the company intends to announce contracts with additional retailers in the country in the near future.
The trust factor
Another theme highlighted by Scott was the company’s focus on being a “responsible lender.” This emphasis is in line with a broader trend in consumer behavior where trust and transparency are paramount. This shift is particularly significant in the BNPL sector, which has come under criticism over potential risks associated with easy access to credit.
Research by PYMNTS Intelligence has shown that consumers who have taken out short-term loans 53% say trust is an important factor when choosing a lender.
This focus similar is in line with Zip’s commitment to highlighting its values of sustainability and ethics. Scott highlighted initiatives for gender equality in the workplace, to Corporate sustainability And to “financial Well-being and inclusion,” and said of the latter that its new financial literacy center had received “very positive” responses from consumers.
The company’s initiatives in these areas come at a time when a growing portion of consumers are prioritizing ethical considerations in purchasing decisions. In fact, according to data from PYMNTS Intelligence, younger generations are significantly more likely than their older counterparts to seek out retailers whose values align with their own. The “Generation ZillennialThe study found that 43% of Zillennials — the microgeneration of those born between 1991 and 1999 — said it was very or extremely important When choosing a retailer, make sure they offer sustainable brands or products. In contrast, only 31% of consumers in total said the same thing. Besides that Zillennials say it is very important that the retailer’s social values align with theirs, compared to 24% of the total sample.
Meeting the needs of these consumers is particularly important as they tend to make up a disproportionate share of the customer base of BNPL providers33 percent of Zillennials Find options for paying later very or extremely important when choosing a dealer compared to 20% of the population in totalAs Zip continues to value customer loyalty and financial Well-beingthe company can strengthen its position in the competitive BNPL market.
