What Do Millennials and Gen Z Really Want From Buy Now Pay Later Services?


When it comes to their preferences and eligibility for innovative financing products, what we thought we knew about the spending habits of the younger demographics has been completely upended. 

Millennials (born between 1981 and 1996) and Gen Z (born between 1997 and 2012) are in fact, high-quality credit users and are more inclined to use a buy now pay later (BNPL) solution from their preferred financial institution, according to research commissioned by financial technology firm Amount.

The study was conducted by the research firm Advertiser Perceptions on behalf of Amount. Advertiser Perceptions surveyed 501 US consumers in October 2021.

The research homed in on consumers that were aged between 18 and 44 who have used BNPL solutions in the past 12 months or were planning to use them in the next six months.

Despite traditional beliefs, the results of the study show that these two groups of youngsters that are using BNPL services are highly educated homeowners with strong credit ratings.

Seventy per cent of respondents have an ‘excellent’ or ‘good’ credit rating, whilst 60 per cent own their own home. In addition to this and in regards to their education, almost 70 per cent of respondents reported having a college degree or higher.

As household incomes increase, so too does interest in BNPL. The data suggests banks should be building relationships with these groups because of their attractive financial profiles and strong credit histories.

The data put forward that those earning $100,000 a year or more have the greatest interest in BNPL at 87 per cent; compared to those in lower-income brackets. Interestingly, nearly 60 per cent of all respondents would prefer a bank-backed BNPL offering compared to one that was offered by a dedicated provider.

Adam Hughes, CEO of AmountAdam Hughes, CEO of Amount
Adam Hughes

“As our research shows, the preference for BNPL among these younger, financially savvy generations opens up prime opportunities for banks seeking to acquire a significant share of a new and growing value pool of customers,” said Adam Hughes, CEO of Amount.

“By educating consumers on BNPL and tailoring more BNPL offerings to customers, financial institutions can build and maintain many long-term, high-value customer relationships for years to come.”

The report also reveals that consumers in these demographic segments would prefer to use BNPL from their own bank, if it were offered. BNPL has become an increasingly popular payment method and can be a gateway to enhanced customer relationships.

“When it comes to the emergence of BNPL to date, it’s undoubtedly been the fintech companies that have made the biggest inroads with consumers,” continues Hughes.

“With this research, what we wanted to do was understand what was going on at the consumer level so we could help educate the banking community, which for the most part has been watching from the sidelines. We came away with two major findings.

“First, that BNPL is actually being used by a variety of people with attractive financial profiles that fall squarely into the credit risk box that banks desire.

“And secondly, that the majority of these BNPL users show a strong preference towards using BNPL from their bank if that was an option. We believe it reveals a massive opportunity for banks that are considering BNPL as part of their broader future customer acquisition and retention strategy.”

  • Tyler is a Fintech Junior Journalist with specific interests in Online Banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.