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Study: BNPL and “Second Chance Consumers”



Some people entered the pandemic with financial problems, while for others, the effects of the pandemic on employment caused late or missed payments and other credit score defaults.

More Americans are affected than we can imagine, because those who live paycheck to paycheck include high-income millennials who are not seen as strapped for financial resources.

In The Second Chance Consumer: How to Buy Now, Pay Payments Later Create New Merchant Opportunities, a PYMNTS and Sezzle Collaboratively, the researchers examined the use of the alternative credit buy now, pay later (BNPL) as the primary means of giving a helping hand to those in struggle.

According to the study, “a second chance consumer is not necessarily a consumer who would be an unreliable or unwanted buyer. We have found that 65% earn more than $ 50,000 per year, and 30% earn more than $ 100,000. The average second chance consumer is 44 years old and has a FICO score of 662 “, just 38 points below the average” good “credit score.

Giving these consumers access to point-of-sale credit is a source of income for merchants that also benefits buyers, potentially impacting everything from cart size to future loyalty.

Learn more: The Second Chance Consumer: How to Buy Now, Pay Later to Create New Opportunities for Merchants, A PYMNTS and Sezzle Collaboration

BNPL budgeting is a thing now

While BNPL achieves fame by making purchases easier by breaking them down into multiple affordable installments, its other emerging use is as a personal budgeting tool. And for some consumers, BNPL is better on budget than using a credit card – for those who even have revolving credit.

According to the study, “Many consumers see BNPL as a way to stretch their budgets. This perception gives merchants who offer BNPL payment options a powerful appeal to consumers who have experienced financial difficulties in the past 18 months.

“A second reason why BNPL is a popular option among second chance consumers exists: these consumers are reluctant to increase their debt, even if credit is available. The researchers found that 42% of second chance consumers without access to credit cards don’t want them.

In fact, 70% of second chance consumers familiar with BNPL “see it as an option that improves their ability to buy the things they want without spending too much. BNPL helps consumers stay on budget while allowing them to shop without the added burden of revolving credit, ”the study says.

Table 2

Read: The Second Chance Consumer: How to Buy Now, Pay Later to Create New Opportunities for Merchants, A PYMNTS and Sezzle Collaboration

An alternative to the costly use of credit

As BNPL’s use cases expand beyond its original base of fashion and cosmetics buyers, applications such as access to credit and credit repair are gaining notoriety and popularity. .

The study notes: “A large portion of the Second Chance survey respondents who chose to use BNPL as an online payment option said it allowed them to spread their payments over time (55%) and helped them manage their monthly expenses (43%). . Both of these abilities were the benefits most cited by second chance consumers, but notable shares of respondents also said it saved them fees (25%) and presented less risk of fraud than other methods. payment (19%).

Wooing the second chance consumer with BNPL is of course also paying off for traders.

Researchers found that 73% of second chance consumers who have used or would use BNPL agree that the payment option “makes me more likely to shop at retailers that offer BNPL ”. Another 73% of second chance consumers said they liked BNPL for more obvious reasons: it allows them to buy “more often than they would otherwise.”

See: The Second Chance Consumer: How to Buy Now, Pay Later to Create New Opportunities for Merchants, A PYMNTS and Sezzle Collaboration



On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.



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