In an unprecedented Cyber Monday shopping spree, budget-conscious holiday shoppers are turning to buy now, pay later (BNPL) services, providing financial flexibility during online purchases. Adobe Analytics projects a staggering $12 billion to $12.4 billion in online spending, with $782 million attributed to BNPL services like Klarna and Affirm, reflecting a remarkable 19% surge from the previous year.
Affirm’s shares surged nearly 12% on the back of this positive data, with its 2023 growth tripling its stock value to over $8 billion. Rival Upstart Holdings also saw a 2.6% rise on Monday, achieving almost a 90% increase in shares throughout the year.
While BNPL has steadily gained traction, the current surge is fueled by cost-conscious consumers seeking to avoid additional fees and interest associated with credit card purchases.
Analyst Dan Dolev from Mizuho Securities notes, «The scale of the adoption (of BNPL) has just gotten so big. It’s become really, really, really popular.»
Despite concerns of a slower holiday season due to economic challenges, early Cyber Monday indications suggest resilient consumer spending. Klarna’s survey revealed nearly half of respondents worried about fully paying off credit card bills from holiday spending.
On Black Friday, Klarna experienced a significant 29% increase in U.S. shopper orders, with popular items including personal electronics and kitchen appliances. Interestingly, average basket sizes for Black Friday orders decreased by 32%, signaling active but more restrained individual purchases during the holiday season.
