American Express has released its Amex Trendex report, the “Digital Payments Edition,” which covers buy now, pay later and peer-to-peer options and provides an update on fraud. The research showed a larger number of consumers are using BNPL, but it’s not in line with the number of retailers offering the option.
However, merchants said they’re planning to offer the service. The report follows several forecasts for a strong holiday shopping season — with online shopping pegged to see robust sales.
The report showed that 39 percent of consumers have used a BNPL payments option in the last year, with 29 percent saying it was for an online buy and 26 percent noting it was in-store. Authors of the report said brands and merchants “recognize that consumers appreciate the payment flexibility and intend to capitalize on the trend.”
While the survey showed that 14 percent of retailers currently offer BNPL, 19 percent said they “plan to adopt it in the next year and an additional 28 percent say they are considering adopting the offer.” Of the merchants that currently offer BNPL, they “see it as a way to attract new customers (57 percent) and increase their overall sales (53 percent),” American Express noted, adding that 50 percent of retail respondents see BNPL “as providing customers with flexible payment options.” Other reasons include encouraging shopper loyalty and driving repeat purchases.
In regard to how BNPL is used, 42 percent of retailers see customers making larger purchases with the option. The report found that over one-third (34 percent) of consumers polled who have used BNPL in the past year “say that it allows them to make purchases that don’t fit within their budget.”
“However, most frequently consumers (39 percent) say they have used BNPL because it helps them to budget their expenses,” the report noted.
With P2P payment options, such as Venmo, PayPal and Google Pay, 78 percent of consumer respondents said they use the service. “Most frequently they are using the payments to purchase goods/services (59 percent) online, in-store or direct from another person,” the report stated.
“Nearly half of consumers (46 percent) use P2P payments to send money to a friend or family member,” American Express said. And looking at use, 15 percent of consumers polled say they’re using P2P for splitting checks at restaurants while 15 percent said they’re using it regularly to pay bills or rent.
With fraud, researchers said in the report that the pandemic “drove consumers and merchants online, leaving both parties open to fraud attempts,” and found that nearly half “of consumers (48 percent) say they have been the victim of fraud in the past year (down from 53 percent in 2019).”
“More than one-in-five experienced a fraudulent attempt to use their credit card or payment information (23 percent) or were victim of a phishing scam (21 percent),” American Express said, adding that 15 percent experienced “advance fee fraud where they received an alert that they won a prize but must pay a fee in advance in order to claim it.”