Buy-now, pay-later services are booming as low- to middle-income consumers look to stretch their budgets.Earnings results from both Klarna and Affirm this month showed significant growth in gross merchandise volume (GMV) on their platforms, as well as upticks in overall users. Klarna reported last week that its GMV hit $33.7 billion, a 33% year-over-year increase, and Affirm’s GMV for its most recent quarter hit $11.6 billion, a 35% year-over-year increase and the 10th straight quarter of over 30% growth. Meanwhile, new reports indicate that BNPL usage among middle-income households, specifically, has picked up.
The services are also seeing that shoppers are hungry not just for splitting up payments over time, but also for special deals. Last week, Affirm held “The Big Nothing” three-day sales event that offered 0% interest across thousands of brands. The campaign outperformed the inaugural edition in October with about 35% more sales. Average cart sizes were $712, up 50% from October. The 0% APR offers are funded by the merchant, and Affirm says it saw a 70% uptick in the number of offers this time around.
“Our Big Nothing works because the whole network shows up at once — real 0% APR offers from merchants, real demand from consumers,” Vishal Kapoor, Affirm’s svp of product, said in an email.
