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Shoppers are slated to spend between $12 billion and $12.4
billion online on Monday, with $782 million of purchases made
with BNPL services, including Klarna and Affirm, representing a
surge of nearly 19% from last year, the data company said.
Affirm shares gained nearly 12% on Monday after Adobe Analytics
released the upbeat data. That stock has more than tripled in
2023, boosting its market value to more than $8 billion on the
growing popularity of BNPL services. Rival Upstart Holdings rose
2.6% on Monday; its shares have gained nearly 90% so far this
year.
BNPL has consistently been growing in popularity over the past
several years, but its usage is getting a further boost from
budget-conscious shoppers trying to avoid the additional fees
and interest that come with purchases made through credit cards.
"The scale of the adoption (of BNPL) has just gotten so big.
It's become really, really, really popular," said Dan Dolev, an
analyst at Mizuho Securities.
Economists anticipated the holiday season would be slower than
recent years due to financial pressure on consumers who are
dealing with higher interest rates and lingering inflation.
However, early indications from Monday's shopping suggests
consumer spending looks to have remained steady even as consumer
finances have deteriorated from post-pandemic strength.
A survey by Klarna found nearly half of those surveyed worried
that they would not be able to pay off credit card bills in full
from holiday spending.
The buy now, pay later firm saw a 29% increase in orders placed
by U.S. shoppers on Black Friday, with some of the most popular
items being personal electronics, televisions and kitchen
appliances.
Average basket sizes on Black Friday orders declined 32%
compared to last year, according to a report from Quantum
Metric, a sign that shoppers aren't making as big of purchases
this year.
(Reporting by Arriana McLymore in New York City and Deborah
Sophia in Bengaluru; Additional reporting by Juveria Tabassum;
Editing by Aurora Ellis)
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