BRIGHT IDEAS

7 MIN READ

Why Canadian Millennials Demand Buy Now, Pay Later at Checkout

by

Samantha Mehra

June 08, 2020

Cash, debit, credit, PayPal and Venmo, mobile tap, Amex, Apple Pay -- when it comes to payment options, Canadian shoppers are spoiled for choice. But often, more options can lead to higher debt, more hidden fees, and overspending, none of which are ideal for those looking for the best ways to lower credit scores, pay off credit card debt, and spend with more scrutiny.

So, now more than ever, it’s vital that businesses offer more flexible payment options at checkout to help ease the financial burden your customers may be facing. To modern customers, this is all about convenience and choice at checkout - two things they have come to expect when they buy from 21st-Century businesses.

Over 6,000 Canadian retailers have gotten this memo already: They are now offering buy now, pay later options to their customers, both in-store and online. These businesses, ranging from retail to healthcare, realize that giving customers agency in how and when they pay for something is a major improvement to the customer experience, can keep e-commerce sales growing, and build customer loyalty over time.

Since its inception, PayBright has provided Canadian shoppers with the ability to pay in easy bi-weekly or monthly payments quickly, easily, and without the no- to low-interest, partnering with over 6000 domestic and international merchants like Samsung, Lenovo, Steve Madden, eBay, Endy and Sephora. The goal? To make the shopping experience more convenient and customized for Canadians by empowering them with better payment choices at checkout. To date, **over 350,000 Canadians have enjoyed using PayBright to pay for their purchases, big-ticket or small. **

If you’re still wondering why more customers across the globe are opting to pay over time for their purchases, read on.

Recap: What is ‘buy now, pay later’?

It has many names across the globe: payment instalments, pay over time, staggered payments, or financing. Whatever you call it, it is a popular payment choice for Canadians right now, particularly those of the Millennial generation, and for those doing the vast majority of their shopping in e-commerce stores. It’s also growing in popularity - here’s why.

5 reasons more shoppers are going with buy now, pay later at checkout

1. Debt-conscious, cash-strapped Millennials prefer a buy now, pay later option.

Installment payment plans are increasingly popular in Canada and beyond, especially amongst Millennials, Gen Y, and Gen Z.

According to Goldman Sachs, Millennials face generation-specific problems specifically related to finances: They have less money to spend and encumbered with debt. They’re also weary of trying to enter the housing market, and are distrustful of traditional financial institutions in general. So, for them, more flexible, transparent, and staggered payment options are ideal.

Offering your millennial audience the option to pay in equal bi-weekly or monthly payments provides them the financial relief and freedom they seek as they juggle more debts and financial concerns than any other generation. Convenient, flexible payment options are key to winning their business, as they are “turning to brands that can offer the maximum convenience at the lowest cost," to their bank accounts and to them personally.

2. Paying over time is a quick and easy customer experience (Spoiler alert: This is what modern customers expect).

Today’s customers are increasingly fickle when it comes to their buying and spending habits, and it makes sense: Finding merchants they can trust to complete their orders, and financiers who offer payment plans that aren’t high in interest and chock-full of hidden fees is top of mind for many the Canadian consumer.

Building that customer trust takes time, and for companies, it takes modernization in the checkout line: More and more merchants see the benefit of offering low- to no-interest instalment payments in their online stores: **It builds trust in customers who can now rest assured that the payments terms are simple and transparent, and they won’t accrue added debts through hidden fees. **

And it doesn’t matter what the customer is shopping for: Instalment payments are a popular choice for anyone shopping in retail or apparel (think Sephora, Boohoo, Steve Madden, or Garage); electronics (think Lenovo, Samsung, or The Source); home and furniture goods (think Wayfair, Endy, or Article); or even sporting goods (think Taylormade). Whether used for big- or small-ticket items, having that option in place will instantly modernize your customer experience and bring you even closer to meeting modern customer expectations.

Especially for those who are keeping a keen eye on their credit score, or trying to limit the number of credit cards accruing in their wallets, a buy now, pay later option in your point-of-sale system (POS) will be an empowering choice for your customers.

3. Payment alternatives are a good fit for those who want to lose credit cards or lower credit card debt

Now and especially going forward, Canadians are actively working to lower credit debt and avoid paying extra interest rates or account/service fees for credit cards or other payment methods. As recently as December, Canadians racked up a devastating $1B in credit card debt, reflecting the dramatic increase in lines of credit, debt levels, delinquencies and insolvencies.

This is an all-time high in credit card debt in Canada, and in 2020, this has worsened. Even before the economic shut-down related to the coronavirus, consumers were using credit cards towards living expenses and essentials, signaling “a growing pressure on personal finances.” It’s no surprise that Canadians with credit card debt are responding: There has been a significant up-tick in consumers checking their own credit profile (a jump of 60%) via bureaus like Equifax and Transunion.

Mitigating risk around credit cards and general debt are top of mind for your customers. Offering the buy now, pay later option at low- to no-interest allows some financial flexibility to those looking to avoid accruing more debts, and have the bandwidth to continue shopping while also paying off adjunct bills. And, it doesn’t hurt that when opting for installment payments, customers are not required to sign up for a new credit card, and thus preventing their stack of cards from growing.

4. Pay in 4? Pay monthly? Buy now, pay later is the ultimate in flexible payment options.

Canadians enjoy flexibility and convenience at every stage of their buying journey, millennials in particular. Luckily, installment payments can meet this expectation via flexible plans: Bi-weekly, no-interest payments (what is known in the trade as ‘Pay in 4’), or monthly, low-interest payments are both available for merchants to offer customers at checkout. It’s not a one-size-fits-all scenario, but whatever you offer, customers will enjoy the increased choice over how they pay at checkout.

With a Pay in 4 option, shoppers receive an instant approval and are empowered to make 4 simple bi-weekly payments for their purchases. Budget-conscious customers experience relief when they see that this plan is interest-free, automated, and isn’t riddled with hidden fees, and doesn’t impact their credit score. It’s a popular plan, and it’s clear why. With a monthly installment payment option, all they need to do is fill out a short form to get approved, and then make equal monthly payments over time. Whether you’re a Samsung or a Sephora, buy now, pay later raises the bar on your customers’ experience.

But what about channels? How can this option appeal to a broader audience? Yes: installment payments are flexible in that they are available for both e-commerce and in-store purchases. This speaks to our multichannel world, one which accommodates the preferences of wildly different age groups and their preferred shopping habits, namely Millennials and Baby Boomers. According to a recent study, 68% of Millennials expect omnichannel accessibility when they shop, which means “having an integrated experience that can effortlessly transition their consumer data from smartphone, to laptop, to local store, and back again.” But, they also enjoy the personalized experience offered by brick and mortar stores and in-person sales associates.

5. ‘Buy now, pay later’ makes your products more affordable, and your customers more likely to complete a purchase. It’s that simple.

Every month, Canadians are faced with bills and other necessary expenses, their income ultimately already spent. When it comes to paying for big-ticket purchases, then, they simply cannot afford to invest a large sum all at once, or opt for plans that rack up interest charges.

This is why low- to no-interest installment payment options are so popular: They provide customers with the opportunity to own, but ultimately pay for substantial purchases in an affordable way that will not incur more personal debt for them.

Ask yourself: Is Buy Now Pay Later the right choice for my customers?

You may be wondering if a Buy Now, Pay Later option is right for your business, and your customers. What are the benefits that will earn their trust, and support your bottom line? Let’s break them down:

  • Customers can pay over time, at thousands of stores, with no hidden fees.
  • Customers receive revolving credit limits that can be used for multiple transactions, helping drive repeat purchases.
  • No retroactive or compounding interest, hidden charges, or prepayment penalties.
  • A pre-qualify feature is offered to merchants, allowing customers to obtain a pre-approval before completing the checkout process.
  • Instant approval and rapid process: Within seconds, PayBright verifies the customer’s credit score,identity, payment information, and provides an instant approval.

To learn more about how to grow your customer base and easily integrate PayBright’s buy now, pay later option into your existing business, read on.


This article is provided for informational purposes only. It is not an exhaustive review of this topic. The content is not financial or investment advice. No professional relationship of any kind is formed between you and PayBright. While we have obtained or compiled this information from sources we believe to be reliable, we cannot and do not guarantee its accuracy. We recommend that you consult your personal finance professional before taking any action related to this information. PayBright is a provider of Buy Now, Pay Later (BNPL) solutions. BNPL providers offer plans with a variety of terms and conditions, including interest rates, fees, and penalties, and have different standards for qualifying for loans. Laws and regulations governing BNPL providers vary by jurisdiction. We recommend that you compare and contrast plans, read the fine print, and conduct detailed research into any BNPL provider before using their services.

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Samantha Mehra

Senior Content Manager

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