Last week we wrote about how the contents of our news alerts for “buy now, pay later” reflect just how dramatically the media narrative has shifted related to the popular but controversial payment alternative.
As we noted, the narrative has moved from wonder over the burgeoning popularity of the payments model to scorn over its contribution to irresponsible financial management, i.e., overspending. In particular among younger consumers.
As we noted in our Black Friday post, most of the coverage that day largely involved pearl-clutching headlines that resurfaced fears that BNPL will cloud consumer decision-making this Holiday season.
This week the script flipped, or at least shifted a bit, back to wonderment over BNPL’s enduring success on the payments landscape.
Big Black Friday
Why? Well, apparently BNPL had a pretty darn good Black Friday.
According to CNBC, citing a report from Adobe Analytics, online sales topped $9.8 billion on Friday, a 7.5% rise over 2022. Buy now, pay later, while still a small fraction of overall sales, saw a 47% Black Friday boost over 2022 to $79 million, according to Adobe Analytics.
So much so that Affirm, one of few pure-play BNPL stocks, saw a 10% hike in the wake of news that Black Friday was a boon for BNPL. On Wednesday, Afrrim closed at 22.57. Yesterday it closed at 29.37. Today it was up to 32.75. Many analysts had predicted Affirm would be a winner this holiday season.
Skittish Consumers?
What is interesting is that most analysts attributed BNPL’s solid Black Friday performance in large measure to consumer skittishness over holiday spending this season, an apparent remnant of recent high inflation, and so on.
Other reports suggest that buy now, pay later will surge this holiday season even as consumers avoid making larger purchases. This may be a sign of health for BNPL but perhaps not for the broader consumer economy. The ability to spread out payments, at little or no interest, still feels like frugality to many consumers apparently. And so BNPL endures, despite ongoing finger-wagging from consumer advocates.
