humm discusses why customers are turning to Buy Now Pay Later options.
They’re young, social and in the prime of their physical vitality (that’s a PC way of saying good-looking!)
Family financial commitments are yet to come.
Whilst most of us think that their income is for fun, friends and looking after number, they are financially savy and are looking to budget.
So yes, for today’s young and cool (just like all the young and cools that went before them) fashion and personal style is high on the agenda.
However, there’s something different about this generation of fashionistas in terms of how they’re budget for and maintain their style. They’re doing it credit smarter.
The interest allergy
Suggest to a 20-something that they get a high interest credit card and they’ll either break out in hives or start lecturing you about the rip-off that points programs are.
This is a credit-smart generation who scoff at the high-interest credit card balances the Gen-Xers racked up. These are the interest-allergic, Buy Now Pay Later kids!
The Buy Now Pay Later win-win
Millennials are the first generation to have been raised in a retail environment where the customer wins.
They’re the first who don’t need to lay-by that denim behind the counter if they can’t afford to pay the whole amount now.
They can pay their deposit and take that denim today – then pay in affordable instalments over time without it costing them a cent of their interest enemy.
And the win for merchants? Not turning off customers at the point of sale.
2.1 million active customers flocked to Buy Now Pay Later platform humm from 2019-2020, up 37% from the year prior, representing a $2.1 billion transaction volume.
An uptake that indicates Buy Now Pay Later, is now what millennial customers expect.
2.1 million active customers flocked to Buy Now Pay Later platform humm, which was up 37% from the year prior.
Polar opposite of bad credit
The difference that makes Buy Now Pay Later platforms like humm of such appeal to the credit savvy, is that the business philosophy is a complete inversion of that of the credit card establishment.
Credit card businesses win when the customer ‘revolves’, that is, they keep racking up expensive debt (and never really get out of it).
Buy Now Pay Later businesses win when the customer pays their purchase off, and can then make another one with a merchant.
4 things the credit-savvy love about Buy Now Pay Later
- No interest ever – it only takes realising that a Balenciaga blouse put on a credit card is going to cost around 20% more than the ticket price, to make an interest-free Buy Now Pay Later option a no-brainer.
- Small, contained borrowing – to the credit-smart crowd, a credit card with a large limit promotes living ‘beyond your means’. Buy Now Pay Later on the other hand offers smaller limits with no way to revolve, and the regularity of an instalment plan on a purchase encourages good money habits. Tick! Tick!
- Wide shopping range – Buy Now Pay Later platform humm, for example, now has more than 79,000 retail partners on board, meaning the range of things you can Buy Now Pay Later for stretches far beyond that Balenciaga blouse or pair of Celine sunnies, to car servicing, paying bills, even solar panels!
- Personal control – whereas putting something on a high interest credit card comes with a guilt hit, the credit savvy enjoy a sense of control when they Buy Now Pay Later that sits well with their financial values. Control is having what you need now, and paying it off as you can afford it, without incurring interest!
Credit-smart fashionistas love humm! If your store would like to add humm as a payment option, you can be up and humming within 48 hours. Find out more.