CHARLOTTE, NC – A digital Lay-a-way for online shopping. Buy now, pay later tech is experiencing massive growth. Retails big and small are offering consumers ways to purchase products and services and pay over time through companies like Afterpay, Affirm, Shoppay and others.
Typically the payments are arranged with no interest rates or hidden fees.
“I think we’re reaching a new customer with this option. One that we might not have reached before,” said Katie Peters.
She is the Logistics Coordinator at Showroom. It’s a mostly online Charlotte-based retailer. She says they offer affordable luxury clothing and accessories.
They are one of many retailers across the country that are now offering payment through companies like Paypal, Affirm, and Afterpay.
“Most of our customers still use the traditional payment methods, but we have seen an increase,” said Peters.
People can purchase something and make no-interest payments over time, typically without a credit check or late fees. It’s similar to lay-a-way, except you get the product instantly.
According to a recent study by Bank of America, the market for buy now, pay later tech is exploding. The sector is on pace to increase by 10 to 15x by 2025. Those companies eventually processing nearly $1 trillion dollars in transactions.
“It really encourages impulse buying, impulse spending, that you can spend more on what you plan on because you’re saying hey I don’t have to pay for the whole item upfront,” said Steven Stack.
Stack is a Charlotte-based financial consultant. He says he’s cautious about buy now, pay later, but says there can be real benefits if used correctly.
“If it’s done right and if you do have discipline and you read the terms of the agreement, you could potentially spread out interest-free payments,” explained Stack.